VBF Tubing (Abridged)
(6 pages of text)
VBF Tubing, a Dutch firm, is facing increased demand for its products, high inventory levels, and expensive setup costs. In light of these problems, the logistics manager must decide how to respond to a proposal that longer production runs be scheduled. The production, cost and market data supplied permit the students to explore the necessity and implications of changing production batch sizes on these competing priorities. In particular, the application of the traditional Economic Order Quantity can be assessed based on other facility-wide operating practices.
- To expose students to a situation in which lot size calculations are impacted by capacity, shared facilities, and the opportunity to eliminate lost production during setups.
The case is designed to be used in an introductory course in operations management, or in an advanced course on manufacturing planning and control systems.
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