Question

1. What happens to all the Christmas candy on retail shelves on December 26?

2. If the profit margin is 25%, how many sales $ is $5 of waste reduction worth?

3. List the five (5) steps in forecasting demand.

4. In Lean manufacturing, 5S is employed. What are these 5 words beginning with the letter S?

5. Why must we consider the entire industry’s production capacity before creating our own capacity?

6. The central focus of layouts is to minimize three (3) things. List them.

7. What is the single most important cost for you to determine when comparing two automobiles?

Answer 1

1. All the Christmas candies which are usually in red and green colour, on retailer's shelves may be either destroyed, or given to charity or they may be taken back to their original manufacturer and recycled.

2. Profit margin: Profit margin is the ratio between the company's profit and the revenue.

Company's profit is the difference of value between the total sales and the total expenses.

Waste reduction: The optimal utilisation of resources are helpful for waste reduction.

Profit margin is 25%

Product cost is $5

Revenue = Product cost/ 1- Gross margin

=5/ 1-0.25= 6.67

Profit = Revenue X Gross margin

= 6.67X0.25= 1.67

3. Forecasting demand: Forecasting demand is a technique in which the old data of the company can be used to estimate the future demand.

Fivesteps in forecasting the demand:

• Objective setting
• The perspective determination
• Selecting appropriate demand forecasting method
• Data collection
• Results estimation

4. Lean manufacturing: Lean manufacturing is a concept which is used for waste reduction. The main focus will be on reducing the waste in manufacturing companies thereby increasing the productivity.

5 S ' s in lean manufacturing:

Sorting

Setting up in order

Shine

Standardization

Sustain