Exercise Ch9-2: Level 1 – Creating a Production Plan for ATC Inc.
ATC Inc. is a manufacturing company that produces industrial valves. As the operations manager, you need to determine the production schedule for manufacturing three valves in the new 102 Series, which is used in oil refineries. Producing the 102 Series valves is a three-part process. During the casting phase, the body of the valve and some of the attaching pieces are created. During the machining phase, the casting surfaces are finished, and the inner valve flange is created. Finally, during the last phase, the valves are assembled and inspected.
The plant manager provided you with a workbook that contains the production times for each production phase, and the unit cost and list price for each 102 Series valve.
The plant manager also told you that your time is limited to 500 hours in the Casting Department, 500 hours in the Machining Department, and 100 hours in the Final Assembly Department. No more time is available in these departments. The workbook also includes the setup costs associated with a production run for each valve. You must account for these costs in the profit amounts for each valve.
Based on historical demand for these valves, the company has a policy that any single valve in the 102 Series should constitute at least 10% of the production run and that no single valve should constitute more than 50% of the total production time. Your goal is to maximize the total profit of producing these valves while not exceeding the time available in each department.
Complete the following:
1. Open the ATCValve.xlsx workbook from the Chapter 9 folder, and then save the file as
2. Write the formulas that calculate the total production time used for casting, machining, and final assembly. Enter a mathematical formula in the objective cell, and then enter formulas to link the objective cell with the variable cells. Add sample values to the variable cells to ensure that your worksheet is set up correctly and produces the expected results.
3. Create a constraints table in the worksheet that identifies the constraints in this problem.
4. Use Solver to determine the optimal combination of valves to build to maximize profit.
5. Produce an answer report of your solution. Which constraints could you modify to maximize the total profit? Place your recommendations in a text box on the answer report worksheet.
6. Save your solution as Scenario 1.
7. Modify the constraints in your constraints table and in Solver that you determined would further improve the solution, and then run Solver again. Save this scenario as Scenario 2. Add a comment to the scenario describing the constraints you modified and why you chose to do so.
8. Produce an answer report of your revised solution. Did your solution accomplish the goals you identified in Step 5? What other changes can you recommend to maximize the total profit? Place your recommendations in a text box on the answer report worksheet.
9. Save and close the 9-2-ATCValve-Production-YourName.xlsx workbook.