En1320 Unit 2 Case Study

The manufacturing is done with help of skilled labor. The skilled labor is one of the major strengths for Olympia, they not only carry out the painting job, various operations on the floor (the floor workers) but also manage the mate assembly line operations (called the assemblers).

The operating expense of all the machines, raw material costs and overheads and the Labor costs and overheads are mentioned in the EXHIBIT 2. The expenses for all the assembly lines are given separately except for the case of Interior Assembly Machine assembly line, which also includes the cost of labor that is being used to operate on these machines.

Currently, the cars manufactured involve automated as well as manual processes of production. The overhead costing

The practices involve working in a single shift per day for 17 hours at a go. There are 2 assembly lines being used for every model, one each for body manufacturing and painting, while the other one for chassis manufacturing and mate process. There is also another Assembly line, which is shared by the three cars and is used for the purpose of Internal Assembly. The assembly lines start up requires warming up for a half hour after which the manufacturing process starts. To ensure minimal electricity usage, the assembly lines are started at a fixed time every day and shut down only in the evening. The costing of the machine operations can be divided into three parts mainly, firstly the electricity costs, which contribute to 45 percent of total machine costs, the coolant cost which contributes approximately 30 percent and lubricants remaining 25 percent costs. A mid day shutdown is avoided unless there is any issue with the unit production process, in which case, both the assembly lines for the car unit being manufactured are closed down to remove the issue, which is a very rare occurrence in

Every single component plays an irreplaceable part in the value chain. The Raw material suppliers are basically of two categories, firstly the ones that provide the raw materials for manufacture the body (i.e. the steel, vinyl and plastic) and the other which provide the tires, radios and air conditioning parts.

These suppliers have been with the organization, since the plant was set up and thus provide a 30 day credit, which is twice the credit size that is being provided in the industry currently.

Next comes the plant where, the three segments are manufactured in parallel assembly lines to meet the demands of market. Currently the assembly lines that are being used are best according to the industry standards.

The distributer lies next in the value chain. Its main purpose is to meet the dealers demand on time and provide seem less transfer of a manufactured car unit from the plant to the shed and warehouse, and from the shed and warehouse to the specific dealer whenever