Project Report-AW321

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Final Project Description – Revision 1

You are the lead systems engineer for Solar Photonics Inc., a company that designs, markets, and installs photoelectric cell (“solar cells”) panels for both the commercial and residential marketplace.


The company Vice President of Engineering has asked you to now perform a detailed systems engineering analysis, to determine a vendor/source that Solar Photonics shall use to manufacture its single line of photoelectric panels.    You are to return to the VP of Engineering in a month’s time, to present to her your analysis of the problem, and make a recommendation as to the supplier whom you and your team believe will do the best job of manufacturing and supplying the firm with the needed solar panels.

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Over the course of your initial investigation, you narrow down your alternatives for the supplier that Solar Photonics will use to three (3) companies.   The three suppliers are:  Photonix, Solar Solutions Inc., and Sun Power Ltd.

Some selected metrics/parameters that your team has received from the three possible suppliers as a result of their proposed bids for the solar panels are as follows

  Photonix Solar Solutions, Inc. Sun Power, Ltd.
Cost per item/unit (Ci) $195.00 $225.50 $265.00
Lead time to delivery (T) 9 weeks 5 weeks 13 weeks
Procurement Quantity (Q) 100 units per order
Demand rate (D) 25 units per period
Replenishment Rate (R) 200 units per period
Holding Cost (Ch) $5.00 per unit per period
Shortage Cost (Cs) $3.95 per unit per period
Procurement Cost (Cp) $350.00 per procurement $200.00 per procurement $130.00 per procurement


  1. Prepare an optimization study, for all 3 suppliers, to include the following parameters:  Q*, L*, and TC*.  Show your calculations, and then make a decision as to which supplier you would choose as a final vendor.




  1. Given the following estimated demand table for the solar panels (based upon marketing focus group data that your company has provided to you), perform a Break Even Analysis, showing: a) the breakeven point graph related to these parameters below, b) assuming the cost to manufacture the solar panels “in house” (upgrading Solar Photonics’ facility to be able to manufacture the panels yourself), whether it is better to make the panels or buy them from your chosen supplier.



Projected Demand in Units
  10 15 20 25 30 35 40
Probability .02 .02 .25 .35 .20 .15 .01
Cost to Make ($) $2000 $3000 $4000 $5000 $6000 $7000 $8000
Cost to Buy ($) TBD** TBD** TBD** TBD** TBD** TBD** TBD**


** NOTE:  this cost will be determined by the vendor that you end up choosing from step


For the Break Even Calculation, recall that the basic formula is


For the purpose of this analysis, here are the formulas you need to use to do your Break Even Analysis:

TCM  =$8500 (fixed cost) + $80per unit

TCB  =  $TBD** x Number of units bought
**Again, the cost per unit to buy depends on the supplier you will select above in #1.  Also, the expected demand needs to be calculated as in your textbook example on Pg. 233, using the probabilities in the table above…


Be sure to put your team members’ full names and CINs on the cover sheet of your final report/write up, to be sure to include everyone on the project team…

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