Microfix Inc.

Microfix Inc. has been manufacturing peripherals for microcomputers for the past decade. Over the years, Microfix's mainstay has been hard disk drives.

Because of a recent slump in sales, Microfix has decided to expand its product line. After much deliberation among executives, engineers, production personnel, and marketing personnel, a decision was made to produce plug-in 256 MB backup systems for Dell laptop computers. Microfix intends to convert its hard disk expertise to plug-in expertise and to become the cost leader for this one type of product for this one series of machines.

The marketing department has performed a major analysis of machines and backup systems and feels that after one year 60,000 units per year is a reasonable sales goal. The feeling among upper management, however, is that this might be overly optimistic. The number management prefers is 1,000 units per week. Current operations use a standard forty-hour week, and the operations vice-president insists that this be maintained for the new product.

Developing the steps in producing the plug-in system has been a project in itself. Engineers, production managers, and assembly line workers collaborated to create a precedence graph and table. First, some twenty-five different steps in production were identified. Then, the group set precedences for each task. At this point, the line workers developed the task times, using known task times for tasks identical to current tasks, estimates for tasks similar to current tasks, and, for some tasks, conjecture. After all of this effort, the following assembly line table was developed.

DISCUSSION QUESTION

The managers still have much work to do. They must begin by determining the appropriate balance that operations should strive for. They must consider that some of the time estimates may be off by as much as 10 percent, and they must consider that the demand will change over time. Find their initial balance, and determine how sensitive this balance is to all of these factors.