Ford’s Struandale Engine Plant in Gqeberha (formerly Port Elizabeth), which assembles the 3.0L V6 Diesel engine for the Next-Gen Ranger and the range-topping VW Amarok, uses 900 000 units of a certain component in the production of engines annually. The components are purchased from suppliers at R200 per unit. It costs the Struandale Engine Plant R500 per order and the carrying cost is 5% of the purchase price.Determine the economic order quantity (EOQ) of the component.The current ordering policy at the Struandale Engine Plant is to order 100,000 units of the components every time it places an order with suppliers. By calculating the total annual ordering cost and the total annual carrying cost, evaluate the optimality of the current ordering policy.Determine the saving that can be made by the Struandale Engine Plant if it switches the ordering policy to the EOQ model. PRETORIA, South Africa, 01 February 2023: Ford has commenced exports of the Next-Generation Ranger from its manufacturing plants inSouth Africa to serve the ever-growing customer demand. The South African-built Next-Gen Ranger is presently shipped to more than 100 globalmarkets.Late last year, the Silverton Assembly Plant in Pretoria became Ford's third manufacturing hub across its International Markets Group (IMG) tostart production of this highly anticipated new global model, which went on sale in South Africa in mid-December 2022."We are proud to commence with Next-Gen Ranger exports to customers around the world from our world-class manufacturing facility in SouthAfrica." "Having modernized the local production and increased the installed capacity to a record 200 000 units per year, we remain committed todelivering quality Next-Gen Rangers from our Silverton Assembly Plant and Struandale Engine Plant."Monthly export volumes from South Africa operations are expected to be around two-thirds of total production, through the Durban and Gqeberha(formerly Port Elizabeth) ports, with Europe being the largest export market. This makes Ford one of South Africa's highest-volume vehicleexporters and a leader in the light commercial vehicle export category.The two-port local strategy is essential for Ford's higher export volumes, with the Gqeberha route set to play a more instrumental role once amore efficient and reliable rail corridor between Gauteng and the Eastern Cape is developed."We are excited about the huge export potential and continue to work with authorities to address bottlenecks such as high level of congestion atDurban's roll-on roll-off (RORO) vehicle terminal, as well as lack of rail infrastructure for Ford to direct most of its export as well as import throughGqeberha," Berry added.Making sure that Ford's South African operations are globally competitive and an integral part of the company's turnaround strategy for itsautomotive operations, the Silverton Assembly Plant was modernized and expanded through an investment of US$1.05 billion (R15.8 billion),announced in 2021. The extensive upgrades included building an on-site Stamping Plant, a highly automated all-new Body Shop, establishing theonly Ford-owned Frame Line in the world, completely revamping Assembly Line with the latest technologies and extensive investment in thelatest tooling for supplier companies. The new and upgraded facilities were essential to unlock the plant's installed capacity of 200 000 vehiclesper year, while consistently delivering world-class quality for Ford's customers around the world. The expanded production for the Next-Gen Ranger also contributed to significant job creation, thanks to the addition of a third production shift atthe Silverton plant in 2022. Photo by Ford SAAn additional US$34 million (R600 million) was invested in the Struandale Engine Plant for the launch of the powerful 3.0L V6 Diesel engine thatheadlines the Next-Gen Ranger line-up, along with upgrades for the latest-specification 2.0L Single Turbo and 2.0L Bi-Turbo engines.The expanded production for the Next-Gen Ranger also contributed to significant job creation, thanks to the addition of a third production shift atthe Silverton plant in 2022. This further reinforced Ford's commitment to South Africa as one of five global manufacturing hubs for the Next-GenRanger. A total of 1 200 jobs were added for the new shift, taking Ford's total workforce to 5 500 employees. Approximately 10 000 jobs wereadded at supplier companies, with local manufacturing for the Next-Gen Ranger now supporting around 60 000 jobs in the total value chain.Source: https://www.thesouthafrican.com/motoring/ford-has-commenced-exports-of-the-next-gen-ranger-2-february-2023/

Economic Order Quantity is an inventory management model that considers the optimal order quantity…

Answered: Ford’s Struandale Engine Plant in…

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...