Assignment 1

SOLUTIONS

Course: MBA 646 - Operations Management Term: Spring, cycle 1

Section: WE01 Class day: Saturday, 9-3 pm
Professor: Dr. Marc Poulin Due date: Week 6 class

Instructions

You are to complete the questions below and submit them by Word document by email. The
assignment is worth 10%. You may work individually or in groups up to 6 students. Support
your answers as much as possible by showing all calculations and assumptions. Please
provide a cover page that includes the name and student id of each member in your group.
Late assignments are deducted a 20% penalty and no assignments are accepted after Week 6
of the class.

You must abide by the ethical rules of CUD as mentioned in the student handbook.

Academic Integrity

Cheating refers to attempting or using unauthorized materials or obtaining

unauthorized assistance in an academic activity, including all types of
examinations or evaluations. This may include impersonating another student;
looking at another student’s materials; using unauthorized notes/books/calculators;
talking to other students; using communication devices such as mobile phones or
any Bluetooth devices.

Plagiarism includes, but is not limited to, representation of others’ work, lending
unauthorized assistance, and using strategies or processes with the aim of
attaining dishonest grades on tests or examinations. Students may not submit any
material created by or acquired from another person or business. Plagiarizing any
type of course work will not be tolerated. All instances of plagiarizing shall be
documented, presented to the Chair/Dean of the program and to the Registrar, and
recorded in the student’s file. Any violations to the Academic integrity will be
sanctioned. Please refer to the Catalog for further information on student Academic
Integrity.
You are to use the PPT: ‘Product Design Case in Mass Customization’ as the case for the
assignment. Note that there will be missing information to answer questions. This is intentional
and you are to state your assumptions when developing your answers. Consider that the
company is making a variety of bedroom furniture, such as the night tables shown in the PPT.
You can find more of their products at this website: http://southshorefurniture.com/ .

1) Production and layout strategies

a) Select a production strategy for the company and justify your answer by comparing the
process strategy, and the product strategy. Link your justification to the company strategy. (2
marks)

The student should mention the following elements in their answer:

- link the strategy of the company with the decision process of selecting the proper production
strategy. It is clear that the production strategy needs to offer product variety

- ‘product’ strategy organizes resources to make complete products. With sufficient demand,
this will result in high utilization of resources and thus low unit cost. However, product
strategies are limited by resource flexibility and therefore cannot offer high variety.

- ‘process’ strategy is opposite to ‘product’ strategy since resources are spread in the
production facility and grouped by resource type. The more resource types are present, the
company can offer more product variety, but will have lower resource utilization and high unit
costs.

- To satisfy the strategy, the company should select the process strategy. If they wanted to
limit costs, they could select the repetitive strategy such as assembly lines.

b) Discuss how the company could decide to have a hybrid layout strategy. (1 mark)

- the student needs to explain the purpose of they hybrid layout strategy: to have more than
one production strategies in order to satisfies more than one goal.

Some options:

1- Repetitive production strategy where part of the production facility is in a process strategy to
makes components, and the second part is in product strategy to assemble the components

2- Some products with high demand can follow the product strategy and those with lower
demand can follow a process strategy.
2) Forecasting and project management

a) Explain the challenges the company may have in forecasting product demand, especially
the variety of furniture accessories. (1 mark)

Since the company is competing on variety, and being first on the market with new featues,
there are several challenges:

1- Past sales are not too reliable for very new features. The company cannot rely on patterns
of sales for a feature to predict very different features. Thus, quantitative techniques such as
times series are not reliable. They need to use qualitative techniques such as using expert
opinion, their sales team, and customer surveys.

2-The more variety they offer, the more difficult it is to forecast the final end product. In this
case, the company could forecast features and components rather than the end product.

b) We have discussed how the first step in capacity planning is obtaining a reliable demand
forecast. Which forecasting technique would you select for the company? (1 mark)

See question a) to justify the qualitative techniques for very new features, and also, forecast
the features and components and not the end products if there is very high variety.

c) Suppose the company wants to design a new product in 30 days. Based on the table below,
explain if this is possible, and which activities would you put the most attention to for being on
time? (2 marks)

Immediate Time
Id Description
Predecessor (days)
A Obtain Customer needs - 3
B Brainstorm ideas - 7
Decide on design
C A, B
option 5
D Make prototype C 12
E Cost estimations B 10
F Test internally D 5
G Test with client D 10
H Decide on final design E, F, G 2

The student must calculate the time to complete the project to see if it finishes within 30 days.

Secondly, they must find the critical path to know which activities are most important to
monitor.

Network diagram:

F
A
5
3
 D
C H
12
5 2

G
B 10
7 E
10

Paths:

A-C-D-F-H = 27

A-C-D-G-H = 32

B-C-D-F-H = 31

B-C-D-G-H = 36

B-E-H =19

The longest path is B-C-D-G-H = 36, which is the earliest time to finish. Therefore, it is not
possible to finish on time. The longest path is the critical path and it contains the activities to
supervise to finish in 35 days.

3) Utilization and bottleneck analysis

Suppose the operations manager of the company would like to evaluate the performance of
the production facility. The production facility consists of a first section that creates
components that are assembled in an assembly line in the second section. In the first section,
the first step consists of creating color on the wood components. There are 500 colored
products that can be produced in a10 hour work shift. The second part consists of drilling,
where components for 600 products per work shift are made. The last part cuts wooden pieces
for 400 products per shift. The assembly line can assemble 300 products per shift.

a) What is the throughput time, the bottleneck activity, and the bottleneck time? (1 mark)

b) What is the estimated capacity per month, where there are 25 working days per month? (1
mark)

c) If the average demand is 5000 units per month, what is the utilization of the production
facility? (1 mark)
Sections 1: paint
Number of colored products = 500
Hours in work shift = 10
time per product = 0.02 hrs / product

Section 2: Drill
Number of colored products = 600
Hours in work shift = 10
time per product = 0.017 hrs / product

Section 3: Cuts
Number of colored products = 400
Hours in work shift = 10
time per product = 0.025 hrs / product

Section 4: Assembly
Number of colored products = 300
Hours in work shift = 10
time per product = 0.033 hrs / product

a)
Throughput time: 0.095
Bottleneck activity is the longest which is the assembly at 0.033 hrs / product
2 min / product
b)
Capacity = Time available / bottleneck time = 7500

c)
Utilization = output/design capacity = 67%