Automotive engineers at Ford Motor Co. are considering the laser blank welding (
ID: 1227342 • Letter: A
Question
Automotive engineers at Ford Motor Co. are considering the laser blank welding (LBW) technique to produce a windshield frame rail blank. Figure 1: A Windshield Frame Rail Blank The engineers believe that, compared with the conventional sheet metal blanks, LBW would result in significant savings for the following reasons 1 Scrap reduction through more efficient blank nesting on coil since the parts to be stamped out of the sheet metal can be patterned more closely Scrap reclamation since the unused sheet metal can be re-welded by laser into a usable blank. 2. On the basis of an annual volume of 3,000 blanks, Ford engineers have estimated the financial data provided in the table below Blanking Method na Laser Blank Welding Description Weight per blank (lb/ part) Steel cost / part Transportation cost / part Blanking cost / part Die investment Conventional Laser Blank 63.764 $14.98 S0.67 S0.50 $106,480 34.870 $8.19 $0.42 S0.40 $83,000 The LBW technique appears to achieve significant savings, so Ford's engineers are leaning toward adopting it. However, the Ford engineers have no experience with LBW, so they are not sure whether producing the windshield frames in this manner is a good strategy. For this windshield frame, it may be cheaper to use the services of a supplier that has both the experience with and the machinery for laser blanking. Ford's lack of skill in laser blanking may mean that it will take six months to get up to the required production volume. If, however, Ford relies ona supplier, it can only assume that supplier problems will not halt the production of Ford's cars. To be clear, Ford can select one of 3 options: 1) make the parts using conventional techniques; 2) make the parts using LBW techniques themselves; or 3) buy the parts from a subcontractor who will charge Ford a price per part with no volume discounts. The subcontractor will use the LBWExplanation / Answer
In this problem a car manufacturer is maufacturing a component Windshield frame. It can be produced at conventional techique or by using special LBW technique. This technique will reduce weight of the component and will lower its cost. There will be an initial investment in Die. It will be used for 10 years. Salvage is zero. Material cost is steel. There is also transportation cost.
Although LBW techique is cost effective, but compay cannot use it will full effeciency until it is maufactured for 6 months. So another alternative is to buy from outsider. Thus company has to either use old method or it will buy from outsider. Any price charged by supllier within cost range of traditional method and LBW method, will be acceptable. So for estimating price range, compute annual equivalent present value of production cost under two methods. Then ascertain, cost per unit. Definitely cost of traditional method will be higher than LBW method. So identify the acceptable price range of outside purchase, based on such price range. The calculations are shown below:
Above table has calculated steel cost and transportation cost of 3,000 parts required in a year. Rates are stated in the problem. Multiply rates by 3,000 units to get the figures of above table.
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Based on above figures cost per unit is calculated below:
Answer: Thus cost per unit under traditional method is $19.05 and under LBW method is $11.88. So any price equal to or higher than $11.88 but less than $19.05 will be acceptable to the company.
Conventional Laser blank' welding 1. Quantity to be produced 3,000 3,000 2. weight per blank (lb) 63.764 34.87 3. Steel cost [$14.98; $8.19] 44940 24570 4. Transportation cost [$0.67; $0.42] 2010 1260 5. Total cost of producing blank 46950 25830 6. Die cost 106480 83000Related Questions
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