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M03 S06 Course Notes

During Day 2 of the Lego simulation, data was collected to calculate exposure to scrap costs, revealing a total of 67 subassemblies. The total scrap cost exposure amounts to $2,180,000, indicating that while production efficiency has improved, scrap production has also increased. This situation poses a significant concern for SVAC.

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8 views3 pages

M03 S06 Course Notes

During Day 2 of the Lego simulation, data was collected to calculate exposure to scrap costs, revealing a total of 67 subassemblies. The total scrap cost exposure amounts to $2,180,000, indicating that while production efficiency has improved, scrap production has also increased. This situation poses a significant concern for SVAC.

Uploaded by

asad
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Module 03 – Section 06 Day 2 Lego Simulation – First 6 minutes -

Scrap cost Calculations

Course notes, Lean 101, Module 3 Section 6


http://www.lean101.ca
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On Day 2, of our simulation, we stop once again at the 6 hour of production to collect data and calculate
our exposure to scrap costs.

Course notes, Lean 101, Module 3 Section 6


http://www.lean101.ca
It is important to note that, although we have improved our production, we now have even more
subassemblies between work stations.

The total number of subassemblies is 67. This works out to $1,340,000.00 for the 16 pin parts used,
$750,000.00 for the 8 pin parts, and $90,000.00 for the 4 pin parts used. The grand total our company’s
exposure to the scrap cost problem is $2,180,000.00. It has become apparent, that we have become
more efficient at producing airplanes, but also more efficient at producing scrap. This is a problem that
SVAC does not wish to have.

Course notes, Lean 101, Module 3 Section 6


http://www.lean101.ca

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