Final Project Contents and

Video Reporting Format

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 Group Project Guidelines
◼ Paper/Report Outline – upload in egroup folder
1. Introduction/Background of the company - 10
2. Define the problem – 15 (note – minimum of 4 OM topics)
3. Develop a model - Gather given data and the
required/unknown data - 15
4. Develop a solution using QM/Excel/or other software -15
5. Analyze the results- 20
6. Recommend courses of action to solve the problem-20
7. Others (Grammar, format, APA, etc) - 5
◼ Video Guidelines – share the link
◼ 15-20 slides; submit copy of ppt slides with the paper
report, 4 slides / page
◼ 15-20 min report
◼ All members should report
 L. Houts Plastic Company (sample company )
1. Background of the case

◼ A large manufacturer of
injection molded-plastics
◼ Has a manufacturing
facility in Charlotte, North
Carolina, USA.

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 2. Define the Problem

◼ The company has

several items in the
plant that it wants
classified according
to an ABC
classification
system

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 Managing Inventory ABC Classification –
3. Develop the Model and Gather Data

ABC Classification System

▶ Divides inventory into three
classes based on annual dollar
volume
▶Class A - high annual dollar
volume
▶Class B - medium annual
dollar volume
▶Class C - low annual dollar
volume
▶ Used to establish policies that
focus on the few critical parts
and not the many trivial ones
▶ Can be 70-25-5 or 70-20-10 or
any appropriate company rule
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 4. Develop the QM Solution

QM Input: Use a
20% count for class
A and 30% count
for class B

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 QM Solution - QM Results

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 Manual solution (optional; to check)

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 5. Analyze the results

◼ Class A items: 1289 & 2347; account ~

80% of $-volume; 18% of total items*
◼ Class B items: 2349, 2363, 2394; account ~
15% of $-volume; 36% of total items*
◼ Class C items: 2395, 7844, 6782, 9111,
8210, 8310; account for 5% of $-volume;
45% of total items*
◼ (Note - * items not an output in QM)

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 6. Recommendation or Conclusion
Percentage of annual dollar usage

A Items = 18% (1289 & 2347)

80 –
70 –
60 –
50 –
40 – A B Items = 36% (2349, 2363, 2394)
30 –
C Items = 45% (2395, 7844,
20 – 6782, 9111, 8210, 8310)
10 – B
C
0 – | | | | | | | | | |

10 20 30 40 50 60 70 80 90 100
Percentage of inventory items

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