Modelling & Simulation for Operations Management

You have been employed as a member of a production improvement task force for a Drive Shaft Manufacturing Company (DSMC). DSMC has been experiencing a severe backlog in sales orders due to antiquated machinery and poor production planning. The Company has just received an unprecedented contract to supply 450 drive shafts by the process given below. However, finances at present are tight and only £250,000 can be invested. Some of the order can be sub-contracted. Your task is to determine the maximum capacity of the current production line after the investment of the £250,000 hence how many parts must be made by the sub-contractor. The cost list of potential capital improvements is given on next page. The current output of the line averages 180 shafts on the two 38-hour shift system.