Question: We consider an assemble to order (ATO) environment. We have three end items (A1, A2, A3), which are assembled out of five components (C1, C2, C3, C4, C5). The bill of materials is given in Table 1 below. Note that we have two common components, C1 and C2, whereas the remaining three components are specific to each end item. We assume assembly is fast and hence it is not a bottleneck, which is reasonable for ATO. Components are manufactured using three machining centers (M1, M2, M3). In Table 2 we list the processing times of each component on each machine; the last row reports the available capacity for each machine; the last column reports the cost of each component (such costs include material cost). For end item demand we consider three possible scenarios (S1, S2, S3) depicted in Table 3. The scenarios have the same probability (1/3). We also list the sales price in the last column; the sales price is larger than the total component cost, which is 60 for each end item. What is the optimal production plan?

Price: $2.99

Solution: The downloadable solution consists of 2 pages
Deliverable: Word Document