I’m having trouble understanding how to approach this question. Its number three on the problem set

The company can choose to buy a back-up machine for Step C for an additional $30,000.The back up would also have a reliability of 0.915, just like the one that is presently used. If they decide toget this back-up machine, what will the new reliability of the system be? Assume that once a machinemalfunctions, the process continues to produce product, acceptable and defective. Use THREE decimalplaces in you calculations

SCM 300 ? ONLINE LAB EXERCISE #6
Metrics and Quality Exercise

Lab Exercise (25 Points)

SCM 300

RELIABILITY
A certain company produces 24,000 tables per year in a three-step process. The three steps in
the process employ machines with the reliabilities listed here:
Step A – 0.989
Step B ? 0.977
Step C ? 0.915
1. (2 Points) What is the reliability of the present process? Provide reliability to three digits.

2. (2 Points) How many defects does this process presently produce annually? Round up to get a whole
number.

3. (2 Points) If the cost per defective unit is $28.50, what is the annual cost of defects to the company at
this time?

4. (3 Points) The company can choose to buy a back-up machine for Step C for an additional $30,000.
The back up would also have a reliability of 0.915, just like the one that is presently used. If they decide to
get this back-up machine, what will the new reliability of the system be? Assume that once a machine
malfunctions, the process continues to produce product, acceptable and defective. Use THREE decimal
places in you calculations.

5. (3 Points) With the back up in place, how many defects will the process produce annually given the
same demand rate?
Round up to get a whole number.

6. (3 Points) How much do they stand to save this year if the cost of the back-up machine is included in
your calculation? Remember to include the cost of the back-up into your calculations.

SCM 300 ? ONLINE LAB EXERCISE #6

SUPPLY CHAIN METRICS ? PROCESS VELOCITY (5 Points)
A computer technician arrives at work at 9AM and finds a department manager delivering three
malfunctioning laptop computers. The computer technician begins to repair the problems as soon as
possible. The technician begins on the first computer and does not start the second computer until the
first is repaired. The technician works on only one computer at a time. The technician takes a lunch
break from 12-1PM.
The first computer is repaired by 11am
The second computer is repaired by 1:30pm
The third computer is repaired by 4pm
.
7. What is the total process velocity?
HINTS: All jobs are there at 9am. Each job leaves when it is completed.
Take the total throughput for all three jobs and divide it by the total value added for all three jobs.

SUPPLY CHAIN METRICS ? CASH TO CASH CYCLE (5 Points)
A certain company sells 500 units of inventory per day
They purchase the inventory at a cost of $10 per unit
They sell the inventory at a price of $25 per unit
Present inventory level = 6,500 units
Present Accounts Payable = $25,000
Present Accounts Receivable = $87,500
8. Calculate the cash to cash cycle?