- What is going on at KCC? Summarize your thoughts regarding the case situation.
- What does KCC produce? Relatedly, explain the importance of KCCs suppliers. As part of your answer, consider KCCs supply chain as illustrated in Figure 1. Notice that the supply chain consists of three tiers. Why might an OEM use several supplier tiers?
- The OEM produces its final product in three versions with many variants. How many unique product combinations are possible? Explain. What are some examples of complexity (and related costs) that result from offering three product versions with many variants? What challenges does this complexity present for management accountants?
- How can differential analysis be applied here to determine if it would be profitable to invest in new equipment to
increase capacity for a constrained resource? - What can we learn about the process flows from Figure 2? Consider the following issues in your response:
- Is there a bottleneck in the process? If so, where is it? Explain.
- How much processing time does each finished product require?
- How many units per hour is the process capable of producing?
- Is there a relationship between the process bottleneck and output per hour? Explain.
- The idea behind Lean concepts is continuous improvement. Lean manufacturing systems expose problems. Identify some problems that the Lean system has exposed.
- What aspects of the Lean production philosophy is KCC doing well? What aspects of Lean are they not following or not doing well?
