AMERICAN INTERNATIONAL UNIVERSITY-BANGLADESH

FACULTY OF BUSINESS ADMINISTRATION

DEPARTMENT OF OPERATIONS & SUPPLY CHAIN MANAGEMENT

OPERATIONS MANAGEMENT
CASE STUDY SET
SECTION: D

SL : ID : 20-42730-1

Name: M Signature:
F RABBI
ASIF

SL DOCUMENT / TOPIC DATE CHECKED

CASE ON :THE CHALLENGES OF

1 / /18
MANAGING SERVICE
2A CASE ON PRODUCTIVITY / /18

ASSIGNMENT ON ON PRODUCTIVITY
2B / /18
CALCULATION
CASE ON :BLUE WATER BRIDGE –
3 / /18
FORECASTING USING MOVING AVERAGE
CASE STUDY: AMAZON ONLINE SALES –
4 / /18
SUPPLY CHAIN DRIVERS
ASSIGNMENT ON INVENTORY
5A / /18
MANAGEMENT CALCULATION
5B CASE ON INVENTORY MANAGEMENT / / 18

6A PRIORITY RULE- SCHEDULING / / 18

ASSIGNMENT ON PRIORITY RULE-

6B / / 18
SCHEDULING
7 CASE ON TRANSPORTATION MODELING / / 18

CASE ON CENTER OF GRAVITY-LOCATION

8 / / 18
PLANNING
CASE STUDY: THE CHALLENGES OF MANAGING SERVICES CS # 1

Answer to the question no 1

1. Since services are often not tangible, the production function is not as easy to grasp.
Also,services are typically unique to each individual customer, it is knowledge based,
and it can behard to evaluate as a whole. For example, if the is a hairdresser who has a
complaint from one oftheir customers about the way their hair was cut, there is
limited action the manager can take tofigure out the situation because it is so unique.
In manufacturing, there is almost always a clear-cut answer to problems.

There are some criteria that show that the services present several managerial
challenges those are not seen in manufacturing i:

1. The managers face difficulty in measuring the effectiveness of the productivity of service.
2. To measure the financial value of the service provided.
3. It may often put hardness to meet the demand as per the requirement.
4. It is difficult to make jobs more structured of service industry.
5. Services require more skilled personnel than those of manufacturing.
6. Cost is often higher in service industry to train the employees.

MOQ 1
 2. 7. The input of service may not be in effect always
3. 8. Service organization need to hold or retain more talented, experienced, related to
reputation, employees in compare to manufacturing organizations.

Answer to the question no 2

Service management is more challenging because it is so much more unspecific than

manufacturing. With a service company, customers can connect to the employees in a way
they cannot do with manufacturing. There are some factors that represent that Service is more
than manufacturing:
First of all, the geographical location of the service industry contributes to the success mostly
where this factor does not matter in the manufacturing industry. Because of the feature
known as inseparability, services need the simultaneous presence of both the customer and
the service provider. Moreover, service organization sometimes often need to be run with less
experienced employees than the skills actually needed in compare to manufacturing company
and that may negatively affect the productivity. Another feature that is known as the
variability in service industry generates obstacles that do not exist in the manufacturing. Even
because of higher demand of skills, the employees’ turnover may increase in the service
organizations that may cause the...

CASE STUDY: PRODUCTIVITY CS

# 2A

Joseph Murray, Grand Valley State University

“Your Garden Gloves” is a small gardening business located inMichigan. The company plants and maintains
flower gardensfor both commercial and residential clients. The company was
founded about five years ago, and has since grown substantially,averaging about 10 new clients and one new
employee a year. Thecompany currently employs eight seasonal employees who are
responsible for a certain number of clients.Each morning crews are assigned to jobs by the owner. Crewsizes
range from two to four workers. Crew size and compositionare a function of the square footage of the garden
and requirementsof the job. The owner feels that large jobs should be
assigned to crews of four workers in order to complete the job in areasonable amount of time.
From time to time, the owner noticed that some jobs, especiallythe largest ones, took longer than she had
estimated, based onthe square footage of the garden space involved. The owner’s son,Joe, decided to
investigate. He kept records of job times and crewsizes, and then used those records to compute labor
productivity.
The results were:
Crew Size Average Productivity per Crew

2 4,234 square feet per day

3 5,352 square feet per day

MOQ 2
 4 7,860 square feet per day

The company operates on a small profit margin, so it is especiallyimportant to take worker productivity into
account.

Questions:

1. Which crew size had the highest productivity? Which crew sizehad the lowest productivity? What are some
possible explanationsfor these results?

2. After a recent storm, a customer called in a panic, saying thatshe had planned a garden party for the upcoming
weekend andher garden was in shambles. The owner decided to send a crew
of four workers, even though a two-worker crew would have ahigher productivity. Explain the rationale for this
decision.

Answer to the question no 1

Output
Productivity (crew 2)=
laber ¿ ¿ ¿

4243 squpare per day

= 2
= 2117
Output
Productivity (crew 3) =
laber ¿ ¿ ¿

5352 squpare per day

= 3
= 1784

Output
Productivity (crew 4) =
laber ¿ ¿ ¿

7860 squpare per day

= 4

= 1965

Crew 2 size had the highest productivity.

Crew 3 size had the lowest productivity.

Some possible explanations for those results: With less workers in the same space, the is a
stronger push to be productivity increasing the efforts per workers. Variability could also
occur due to the expertise of each individual worker. One reason for the difference in
productivity between a crew size of 2 and a crew size of 3 could be that when 3 workers are
assigned to a small job, workers may be getting in the way of each other, which could cause
wait time. A second reason could be that the
larger crew size may lead to more standing around and talking. A third reason might be

MOQ 3
those workers are more productive when working in pairs.

Answer to the question no 2

The two-person crew has the highest productivity per workers. However, the four-person
crew produces the highest productivity overall of 7860 square feet per day. Given the
situation was urgent due to the time constraints, the owner wanted to increase the like hood of
the being completed.

CASE STUDY: PRODUCTIVITY CALCULATION CS # 2B

1. Compute the total productivity measure for each of the weeks shown. Assume 40 hrs weeks and an hourly
wage $10. Overhead cost is 1.5 times to total weekly labor cost. Material cost is $5 per kg. Standard price is
$80 per unit

Week Output (Units) Workers Materials (Kg)

1 20,000 5 350

2 15,000 6 370

3 22,000 7 380

Also compute the productivity growth of week 2 and 3 of this problem.

Output
Total productivity measure week 1 = labor cost + Matarial cost+ overload cost

20000× 80 per unit

= ( 5× 40 ×10 )+ (350 × 5 )+(5 × 40 ×10 ×1.5)

160000
= 6750

= 237.04 per units

Output
Total productivity measure week 2 = labor cost + Matarial cost+ overload cost

15000× 80 per unit

= ( 6 ×40 × 10 )+ ( 370× 5 ) +(6× 40 ×10 × 1.5)

MOQ 4
 120000
= 7850

= 152.87 per units.

Output
Total productivity measure week 3 = labor cost + Matarial cost+ overload cost

22000× 80 per unit

= ( 7× 40 ×10 )+ ( 380× 5 ) +(6 × 40 ×10 ×1.5)

1760000
= 8900

= 197.75 per units.

Current productivity week 3 = 197.75 per units.

Previous productivity week 2 = 152.87 per units.

current productivity− perivous productivity

Productivity growth = × 100
perivous productivity

197.75−152.87
= × 100
152.87

= 29.35%.

MOQ 5
CASE STUDY: BLUE WATER BRIDGE - FORECASTING CS # 3

MOQ 6
MOQ 7
CASE STUDY:FORECASTING – MOVING AVERAGE CS # 3

West Actual Moving Average Error Absolute Squared Percent

(A) (MA3) E Error Error Error
Bound (A-F) |E| E2 E%

January,
13,253 -
1984

February,
12,878 -
1984

March,
14,716 -
1984

April, (13,253 +12,878 + 14,716) /

14,186 570 570 325,280 4.0%
1984 3 = 13,616

May, (12,878+14,716+14,186 / 1,772 1,772 325,280

15,699 11.29%
1984 3)=13,927

June, (14,716+14,186+15,699/3)=1
15,619 752 752 565,504 4.81%
1984 4,867

July, (14,186+15,699+15,619 /
13,799 -1,369 1,369 1,874,161 9.92%
1984 3)=15,168

August, (15,699+15,619+13,799 /
14,612 -427 427 182,329 2.92%
1984 3)=15,039

September, (15,619+13,799+14,612 /
14,411 -266 266 70,756 1.85%
1984 3)=14,677

October, (13,799+14,612+14,411 /
16,232 1,958 1,958 3,833,764 12.06%
1984 3)=14,274

November, (14,612+14,411+16,232 /
15,603 518 518 268,324 3.32%
1984 3)=15,085

December, 14,411+16,232+15,603 /
13,525 -1,890 1,890 3,572,100 13.97%
1984 3)=15,415

January,
1985

1688 9522 13,832,204 64.15%

.33
Formula Calculation Result

MAD = |E| / n = 9522 / 9 1058

= 13,832,204 / ( 9-1 )
MSE = E2 / (n-1) = 13,832,204 /8
1729025.25

=
MAPE E|/A)*100%} =64.15% / 9 7.13%
/n

MOQ 8
CASE STUDY: AMAZON ONLINE SALES – SC DRIVERS CS # 4

Amazon sells books, music, and many other items over the Internet and is one of the pioneers of
online consumer sales. Amazon, based in Seattle, Washington, started filling all orders using books
purchased from a distributor in response to customer orders. As it grew, the company added warehouses,
allowing it to react more quickly to customer orders. In 2009, Amazon had about 20 warehouses in the
United States and another 30 in the rest of the world. It uses the U.S. Postal Service and other package
carriers such as UPS and FedEx to send products to customers. Outbound shipping-related costs at
Amazon in 2009 were almost $2 billion.

With the Kindle, Amazon has worked hard to increase sales of digital books. As of 2009, Amazon
offered more than 460,000 books in digital form. The company has also added a significant amount of
audio and video content for sale in digital form.

Amazon has continued to expand the set of products that it sells online. Besides books and music,
Amazon has added many product categories such as toys, apparel, electronics, jewelry, and shoes. In
2009, one of its largest acquisitions was Zappos, a leader in online shoe sales. This acquisition added a lot
of product verity. According to Amazon annual report, this required creating 121,000 product descriptions
and uploading more than 2.2 million images to the Website!

Analyze the case with regards to supply chain drivers

Facilities Inverntories

Transportation Information

Pricing Sourcing

CASE STUDY: INVENTORY MANAGEMENT CS#5A

MOQ 9
A large chocolate factory buys flour in 50-kg bags. The factory uses an average of 6,600 bags a year. Preparing
an order and receiving a shipment of flour involves an ordering cost of $210. Annual carrying costs are $3 per
bag. The factory operates 320 days a year.
a. Calculate the EOQ.
b. How many times per year does the store reorder?
c. What is the length of an order cycle?
d. What is the total cost if the EOQ quantity is ordered?

Item Formula Input / Computation / Result Units

Annul Demand, D 6,600 units

Setup or Order Cost,
210 dollar
S
Holding cost, H 3 dollar
Operating days per
320 days
year, Odp
2 DS
EOQ, Q*
Q0=
√ H
√ 2 X 6,600 X 210
6
=¿ ¿ 961.24 units

6,600
Number of orders per =6.87
D / Qo 961.24 times
year

961.24
Length of Order X 360=¿46.59
(Qo / D ) x Odp 6,600 days
Cycle

6,600
Total Cost TC=
D
( ) ( )
Q0
S+
Q0
2
H
TC= ( 961.24 ) X 210+( 961.24
2 )
X3
dollar
=2883.74

MOQ 10
CASE STUDY: INVENTORY MANAGEMENT CS#5B

Grill Rite
Grill Rite is an old-line company that started out making wooden matches. As that business waned, the company
entered the electric barbecue grill market with five models of grills it sells nationally. For many years the company
maintained a single warehouse from which it supplied its distributors,
The plant where the company produces barbecue sets is located in a small town, and many workers have been with the
company for many years. During the transition from wooden matches to barbecue grills, many employees gave up
their weekends to help with changing over the plant and learning the new skills they would need, without pay. In fact
Mac Wilson, the company president, can reel off a string of such instances of worker loyalty. He has vowed to never
layoff any workers, and to maintain a full employment, steady rate of output “yes, I know demand for these babies
(barbecue grills) is seasonal, but the inventory boys will just have to deal with it. On an annual basis, our output
matches sales.”
Inventory is handled by a system of four warehouses. There is a central warehouse located near the plant that supplies
some customers directly, and the three regional warehouses. The vice president for sales, Julie Berry, is becoming
increasingly frustrated with the inventory system that she says “is antiquated and unresponsive.” She points to
increasing complaints from regional sales managers about poor customer service, saying customer orders go unfilled
or are late, apparently due to shortages at the regional warehouse. Regional warehouse managers, stung by complaints
from sales managers, have responded by increasing their order sizes from the main warehouse, and maintaining larger
amounts of safety stock. This has resulted in increased inventory holding costs, but it hasn’t eliminated the problem.
Complaints are still coming in from sales people about shortages and lost sales. According to managers of the regional
warehouses, their orders to the main warehouse aren’t being shipped, or when they are, they are smaller quantities
than requested. The manager of the main warehouse, Jimmy Joe (“JJ”) Sorely, says his policy is to give preference to
“filling direct orders from actual customers, rather than warehouse orders that might simply reflect warehouses trying
to replenish their safety stock. And besides, I never know when I’ll get hit with an order from one of the regional
warehouses. I guess they think we’ve got an unlimited supply.” Then he adds, “I thought when we added the
warehouses, we could just divide our inventory among the warehouses, and everything would be okay.”
When informed of the “actual customers” remark, a regional warehouse manager exclaimed, “We’re their biggest
customer!” Julie Berry also mentioned that on more than one occasion she has found that items that were out of stock
at one regional warehouse were in ample supply in at least one other regional warehouse.
Take the position of a consultant called in by president Mac Wilson.

Q: Explain the problems and what recommendations can you make to alleviate the problems the company is
encountering?

MOQ 11
CASE STUDY: SCHEDULING CS#6A

Determine the sequence of jobs, the average flow time, average tardiness, and average number of jobs at work
center, for each of the rules, FCFS, SPT and EDD.

Job Sequence: Processing Time Due Dates Flow Time Tardiness

FCFS
A 12 15
B 6 24
C 14 20
D 3 8
E 7 6

Makespan
Average flow time
Average tardiness
Average number of jobs at work center

Job Sequence: Processing Time Due Dates Flow Time Tardiness

SPT


Makespan
Average flow time
Average tardiness
Average number of jobs at work center

Job Sequence: Processing Time Due Dates Flow Time Tardiness

EDD


Makespan
Average flow time
Average tardiness
Average number of jobs at work center

MOQ 12
CASE STUDY: SCHEDULING CS#6B
Determine the sequence of jobs, the average flow time, average tardiness, and average number of jobs at work
center, for each of the rules, FCFS, SPT and EDD.

Job Sequence: Processing Time Due Dates Flow Time Tardiness

FCFS
A 8 20
B 10 18
C 5 25
D 11 17
E 9 35

Makespan
Average flow time
Average tardiness
Average number of jobs at work center

Job Sequence: Processing Time Due Dates Flow Time Tardiness

SPT


Makespan
Average flow time
Average tardiness
Average number of jobs at work center

Job Sequence: Processing Time Due Dates Flow Time Tardiness

EDD


Makespan
Average flow time
Average tardiness
Average number of jobs at work center

MOQ 13
CASE STUDY: TRANSPORTATION MODELING CS#7
Supply Origins Demand Destinations

D1 200
13
350 S1 14 5
15 17
16 D2 200
19
300 17
S2
16

D3 300
14
19
350 S3

D4 300
13

1.Solve the Transportation Model using North West Corner Method:

D1 D2 D3 D4 SUPPLY
S1

S2

S3

DEMAND
TOTAL
COST:

2. Solve the Transportation Model using Least Cost Method:

D1 D2 D3 D4 SUPPLY
S1

S2

S3

DEMAND
TOTAL
COST:

CASE STUDY: LOCATION PLANNING USING CENTER OF GRAVITY METHOD

CS#8

MOQ 14
 FFC is contemplating to setup a cold store warehouse to distribute to these following outlets. Weekly
demand is shown below. Find the most suitable location and intersection setup the warehouse.

X Y Weekly
Location
Coordinate Coordinate Quantity
D1 7 8 300
D2 9 9 600
D3 8 8 200
D4 5 8 250
D5 4 7 450
D6 3 8 150
D7 4 4 200
D8 5 9 250

 14 20 1500

x́=¿ 3.7

ý=¿ 4.1

Draw graph here:

10

0,0 1 2 3 4 5 6 7 8 9 10

MOQ 15