Reduction of cost due to plan increases for mass production models at Fujitsu Ten Corporation of the Philippines, Santa Rosa, Laguna.

Date

4-2010

Degree

Bachelor of Science in Industrial Engineering

College

College of Engineering and Agro-Industrial Technology (CEAT)

Adviser/Committee Chair

Arvin Joseph M. Elauria

Committee Member

Kathleen B. Lee, Romark O. Cayube

Abstract

Fujitsu Ten Corporation of the Philippines is a car infotainment and automotive electronics products manufacturing company in the Philippines. The company is part of the Fujitsu Ten Group Companies with headquarters in Kobe, Japan. It caters both to local and export demand. The company receives customer orders in the form of week plans for a particular month. The weekly plan is subjected to variability when customers notify the company to increase their orders for mass production models. To respond to plan increases, the company devised a procedure in accepting the increase. The only stipulation in the procedure in accepting the increase is the sbility of the supplier to ship the parts brought about by the plan increase. However, the procedure failed to include the cost that will be incurred when a plan increase is accepted. In the Second Quarter of 2009, the estimated cost brought about by plan increases amounted to PhP37,704.27 for the airbag line alone. The root cause analysis showed two experimental and two controllable factors.The first experimental factor identified was inability to the procedure on imposing deadlines for customers to send plan increase notification. Two alternatives air shipment have been formulated to mitigate the root cause. The two alternatives aim to set the deadline for customers to notify plan increase with the first alternative based on sea shipment and the second alternative based on air shipment. The controllable root causes identified in the study were machine and equipment breakdowns and failure of team members to follow standards resulting to quality problems. Using the Analytical Hierarchy Process, the alternative chosen for setting the due date was to set the due date based on air shipment and transfer the freight cost that will be charged by suppliers to customers. To mitigate variability in the weekly plan, demand should be influenced by encouraging backordering the cost of increase to the customer requesting for the increase.

Language

English

LC Subject

Inventory control--Cost effectiveness--Decision making, Inventory analysis

Location

UPLB College of Engineering and Agro-Industrial Technology (CEAT)

Call Number

LG 993 2010 E66 L53

Document Type

Thesis

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