1. Project Background The Advanced Diesel Engine Company is introducing a groundbreaking new engine design. As part of t

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1. Project Background
The Advanced Diesel Engine Company is introducing a
groundbreaking new engine design. As part of the introduction, the
company will be providing world wide maintenance support for the
engines. This support will require a field support unit used
by maintenance personnel to make updates and repairs as
needed. A new feature being introduced with this engine is
the ability of the maintenance unit to rapidly produce certain
repair parts on site as needed.
The engines will be introduced into 3 regions: North America,
Europe, and Asia. The Asia region includes China and
Japan. The North American region includes the US and Canada
(including Hawaii and Alaska). The European region includes
Western Europe and Eastern Europe.
Specifications:
The maintenance unit includes 3 main sub systems that must be
procured: region specific chassis, tooling and manuals, and
on-board computer diagnostic system with 3D printer.
Each chassis can be built in any of the regions and shipped to
the region as needed. The cost of procuring the chassis is
listed in Table 1. Table 2 and 3 show the cost and time of
transporting the unit to the appropriate region. All items
must be at the assembler prior to building the unit. Each
unit requires 3 months to assemble the completed unit and can
produce 1 unit per month. Expediting a unit will incur a 20%
penalty.
Table 1 Chassis costs
Ship to region
Manufacture in region
North America
Europe
Asia
North America
$.05M
$.055M
$.06M
Europe
$.06M
$.06M
$.07M
Asia
$.075M
$.075M
$.065M
Table 2 – Chassis Shipping Costs
Ship to region
Manufacture in region
North America
Europe
Asia
North America
$.05M
$.1M
$.12M
Europe
$.2M
$.05M
$.15
Asia
$.15M
$.2M
$.06M
Table 3 – Chassis Shipping Time
Ship to region
Manufacture in region
North America
Europe
Asia
North America
1
2
2
Europe
2
1
3
Asia
2
3
1
The on-board diagnostic system and 3D printing system are a
proprietary design of the engine manufacturer. The company
sub contracts with a vendor to assemble the systems and prepare
them for installation on the chassis. The assembly time and
cost for the units are shown in Table 4 and 5. The contract
includes procuring the needed hardware to meet design
specifications and testing to ensure the equipment procured meets
design specifications as well as acceptance testing for each
unit. A contract for the manufacture of the system has been
awarded by another group with the units entering the inventory
starting with the 12th month at a rate of 3 per month.
Table 4 – Computer Assembly Time
Destination Region
Contractor 1
Contractor 2
Contractor 3
North America
3
2
2
Europe
2
3
4
Asia
3
3
4
Table 5 – Computer Assembly Costs
Destination Region
Contractor 1
Contractor 2
Contractor 3
North America
$1M
$.9M
$1.1M
Europe
$1.1M
$1M
$1M
Asia
$1.2M
$1.1M
$1M
The maintenance unit will be stocked with a standard set of
tools needed to perform all needed maintenance along with bench
stock of nuts, bolts, screws, etc. Each unit includes a
complete set of manuals in both printed and electronic form. The
tooling and maintenance stock are distributed from a central
warehouse and should be available for shipment when needed.
The vendor for certain engine components is based in Europe and
will provide manuals for those subsystems.
Delivery of the completed units should be made in time to
support 2 months of training prior to introducing the units into a
region. One unit is required for training and the remaining
units are required by the introduction date as shown in Table
6.
Table 6 Introduction Date
Region
Number of Units
Introduction Date
North America
3
36
Europe
3
32
Asia
4
30
Hawaii
2
35
The schedule starts in January as Month 1. Once all items
arrive at the assembler, the assembly time will take 3
months. The chassis shipping times are to be used for
shipping other items (chassis, computers, tooling).
Make any assumptions as needed to complete the tasks.
Task Requirements:
Stage 1: (25%)
Please show your work or explain your work.