AMERICAN INTERNATIONAL UNIVERSITY-BANGLADESH

FACULTY OF BUSINESS ADMINISTRATION

DEPARTMENT OF OPERATIONS & SUPPLY CHAIN MANAGEMENT

OPERATIONS MANAGEMENT
CASE STUDY SET
SECTION:

SL : ID : 20-42396-1

FARDIN BIN OMAR MOBIN
Name: Signature:

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-1 : As per the stated case, the following are the managerial challenges suffered by the
service organization but not by manufacturing organization.

Jobs in service organizations are often instructed than in manufacturing environments.

Often, there is no synchronization among middle level and higher level managers.
Service industries often employ worers who are less skiled in and low on knowledge.
It affects the productivity of the organizations.
Customer interaction is much higher in service sector. It therefore makes the sales
proces complex and lenthy.
Employee turnover is higher in low skilled jobs. The workers tend to leave jobs at a
faster pace. It affects the service organization in a huge way.
The managers face difficulty in measuring the effectiveness of the productivity of
service.
To measure the financial value of the service provided.
It may often put hardness to meet the demand as per the requirement.
It is difficult to make jobs more structured of service industry.
Services require more skilled personnel than those of manufacturing.

All those demanding situations which are additionally referred to as obostacles for the
supervisor of provider industry.

Answer-2 : There are some factors that represent that Service is more than manufacturing:

Why does service management present more challenges than manufacturing? Service
management is more challenging because it is so much more unspecific than manufacturing.

MOQ 1
With a service company, customers can connect to the employees in a way they cannot do
with manufacturing.

Managerial demanding situations offered in offerings that do not floor in production are
because of the reality that carrier environments lack the shape of producing environments. A
domestic with out shape will continuously be subjected to obstacles. There is consistent
consumer touch in servicing; production does now no longer have distractions of direct
consumer touch, which lets in them to pay attention on production. Service people commonly
lack the abilties and qualifications of producing applicants which ends up in excessive
turnover fees in carrier organizations. Manufacturing jobs generally tend to visit excessive
professional people and that they continue to be pro of their positions and matters run easily
due to the fact human beings are aware of appearing their roles efficiently.
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. Due to the property called
inseparability, the services require the simultaneous presence of both the client and the
service provider. In addition, the service organization sometimes has to be run with
employees who, compared to the manufacturing company, are less experienced than the skills
actually required, and this can be negative. affect productivity. Another characteristic known
as variability in the service industry creates barriers that do not exist in manufacturing. Also,
due to the increased need for skills, employee turnover in service organizations can increase,
which can cause some problems.

CASE STUDY: PRODUCTIVITY

CS # 2A

MOQ 2
Joseph Murray, Grand Valley State University
“Your Garden Gloves” is a small gardening business located in Michigan. The company plants and
maintains flower gardens for 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. The company currently employs eight seasonal employees who are
responsible for a certain number of clients. Each morning crews are assigned to jobs by the owner.
Crew sizes range from two to four workers. Crew size and composition are a function of the square
footage of the garden and requirements of the job. The owner feels that large jobs should be
assigned to crews of four workers in order to complete the job in a reasonable amount of time.
From time to time, the owner noticed that some jobs, especially the largest ones, took longer than she
had estimated, based on the square footage of the garden space involved. The owner’s son, Joe,
decided to investigate. He kept records of job times and crew sizes, 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

4 7,860 square feet per day

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

Questions:

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

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

Answer-1 :
Average productivity per worker of first crew = 4234/2 = 2117
Average productivity per worker of second crew = 5352/3 = 1784
Average productivity per worker of third crew = 7860/4 = 1965
Average productivity per worker of first crew is the highest. and that of second crew is the
lowest.

Answer-2 :
After a recent storm, a customer called in a panic, saying that she had planned a garden party
for the upcoming weekend and her garden was in shambles. The owner decided to send a
crew of four workers, even though a two-worker crew would have a higher productivity.
Explaining the rationale for this decision.

The productivity of the team of 4 was not the highest but even with this being said the total
time to compelete the ceanup. Should still take much less time than the team of 2 people
easpecially if it is a large job.

Also we have to remember that 1 person is better than 2 person. So in this case we couldn’t
send the group of 2 people. They are good at in avarage that doesn’t mean they will perform
good at this case. So 4 crew is better than 2 crew. That’s why they are sending 4 person.

MOQ 3
MOQ 4
MOQ 5
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 of this problem.

Week-1:

= Output / Labor cost + Material Cost + Overhead Cost

= (20000×80) / ( 5×40×10) + ( 350×5) + ( 350×5×1.5)

= 1600000 / (2000+1750+2625)

= 1600000/6375

=250.98

Week-2:

= Output / Labor cost + Material Cost + Overhead Cost

=(15000×80) / ( 6×40×10) + (370×6) + (370×6×1.5)

=1200000 / ( 2400+2220+3330)

=150.94

Productivity growth of week 2:

={(Current Period Productivity-Previous Period Productivity ) / Previous Period Productivity} × 100

= {(150.94 - 250.98) / 250.98} × 100

= -39.84%

Week-3:
= Output / Labor cost + Material Cost + Overhead Cost

=(22000×80) / ( 7×40×10) + ( 380×7) + ( 380×7×1.5)

= 1760000 / ( 2800+2660+3990)
=186.24

MOQ 6
Productivity growth of 3:

= {(Current Period Productivity-Previous Period Productivity ) / Previous Period Productivity} × 100

= {(186.24-150.94) / 150.94} × 100

= 23.39%

CASE STUDY: BLUE WATER BRIDGE - FORECASTING CS # 3

MOQ 7
MOQ 8
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, (14186+14,716+12,878)/3 1,71772 .
15,699 71772 53139984
1984 =13927 2 11.29%
2
June, (15,699+14,186+14,716)/3 1752,1 1565504, 44.81%7
1984
15,619
=14867
752,168
68 364,224 .5%
- -
July, (15,619+15,699+14,186)/3 11369,1 01874161
13,799 13691 89.92%.
1984 =15168 44 7,592
44 3%
August, (13,799+15,619+15,699)/3 91823296 2.92%-
1984
14,612
=15039
-4277 427
,209 7.2%
-4.
September,
14,411
(14,612+13,799+15,619)/3 -266- 26628 39470756
1.85%4
1984 =14677 628 ,384
%
October, (14,411+14,612+13,799)/3 51958 11958,5 13833764 12.06%
16,232
1984 =14274 55 55 9,062 9.6%
1,
November, (16,232+14,411+14,612)/3 1, 3.32%8.
15,603 1,3518 26832476
1984 =15085 518329 5%
6,241
December,
13,525
(15,603+16,232+14,411)/3
-1890 18901,5 35721002 13.97%
1984 =15415 60 ,433,600 1.5%
January,
   
1985

16 557 1383 63.

18 0 2202 51%
Formula Calculation Result

MAD = |E| / n 5570/9 618961618.89

MSE = E2 / (n-1) 13832202/(9-1) 1729025.251,504,560

MAPE = E|/A)*100%} / n ={(| 4.580.34%

MOQ 9
 5570|/13525)*100%}/
9

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

MOQ 10
Pricing Sourcing

CASE STUDY: INVENTORY MANAGEMENT CS#5A

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 units

Setup or Order
dollar
Cost, S
Holding cost, H dollar
Operating days per
days
year, Odp
2 DS
EOQ, Q*
Q0=
√ H
units

Number of orders
D / Qo times
per year

Length of Order
(Qo / D ) x Odp days
Cycle

D Q0
Total Cost TC=
( ) ( )
Q0
S+
2
H
dollar

MOQ 11
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 12
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 13
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 14
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 15
 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 16