AMERICAN INTERNATIONAL UNIVERSITY-BANGLADESH

FACULTY OF BUSINESS ADMINISTRATION

DEPARTMENT OF OPERATIONS & SUPPLY CHAIN MANAGEMENT

OPERATIONS MANAGEMENT
CASE STUDY SET
MIR MD. AULAD HOSSAIN
ID:20-43283-1
SECTION: C

SL DOCUMENT / TOPIC DATE CHECKED

CASE ON :THE CHALLENGES OF MANAGING

1 / / 18
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 MANAGEMENT
5A / / 18
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

Ans » Because services are not always tangible, understanding the production
function is more difficult. Furthermore, services are typically unique to each individual
customer, are knowledge-based, and can be difficult to evaluate as a whole. For
example, if a hairdresser receives a complaint from one of their customers about the
way their hair was cut, the manager's options for resolving the situation are limited
because the situation is so unique. In manufacturing, there is almost always a simple
solution to a problem.

Answer to the Question No: 2

Ans: Service management is more difficult to manage because it is less specific than
manufacturing. The government, according to the text, does not even have a
consistent definition of what a service is. It is easier to understand the difference
between the right and wrong way to do things in manufacturing.

MOQ 1
CASE STUDY: PRODUCTIVITY CS # 2A

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.

Productivity

MOQ 2
 Answer to the Question No: 1

Answer : Given that,

Crew Average Productivity per Crew

Size
2 4,234 square feet per day

3 5,352 square feet per day

4 7,860 square feet per day

Productivity crew Size (2) = 𝑂𝑢𝑡𝑝𝑢𝑡𝐼𝑛𝑝𝑢𝑡 = 4 ,234

2 = 2,117

𝑂𝑢𝑡𝑝𝑢𝑡 5,352
Productivity crew Size (3) = = = 1,784
𝐼𝑛𝑝𝑢𝑡 3

𝑂𝑢𝑡𝑝𝑢𝑡 7,960
Productivity crew Size (4) = = = 1,965
𝐼𝑛𝑝𝑢𝑡 4

In this case, when solve this problem we can see that the number of crew size (4) is the
highest productivity 1,965 and the number of crew size (2) is the lowest productivity 2,117.

Ans to the Question NO :-2

The highest productivity is 2,117

• Partial measures 4 worker = 𝑂𝑢𝑡𝑝𝑢𝑡

𝐿𝑎𝑏𝑜𝑟

= 529.25
• Partial measures 2 worker = 𝑂𝑢𝑡𝑝𝑢𝑡
𝐿𝑎𝑏𝑜𝑟

= 1,058.5

MOQ 3
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
Multifactor measures =
𝐿𝑎𝑏𝑜𝑟+ 𝑀𝑎𝑡𝑒𝑟𝑖𝑙𝑠+𝑂𝑣𝑒𝑟ℎ𝑒𝑎𝑑

Productivity week 1

Productivity week 2

Productivity week 3

𝐶𝑢𝑟𝑟𝑒𝑛𝑡𝑦 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦−𝑃𝑟𝑒𝑣𝑖𝑒𝑠 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦

Productivity Growth = ∗100
𝑃𝑟𝑒𝑣𝑖𝑒𝑠 𝑃𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑣𝑖𝑡𝑦

= 25.71

MOQ 4
MOQ 5
CASE STUDY: BLUE WATER BRIDGE - FORECASTING CS # 3

CASE STUDY: FORECASTING – MOVING AVERAGE CS # 3

West Actual Moving Average Error Absolute Squared Percent

Bound (MA3) E Error Error Error
(A) (A-F) |E| E2 E%
Percent 13,253 -
Error 12,878 -

MOQ 6
E% 14,716 -
Percent 14,186 (14,716+12,878+13,253) 570 570 3,24,900 4.36%
/3= 13,615

Error 15,699 (14,186+14,716+12,878) 772 772 5,96,498 2.63%

/3 = 14,926
E% 15,619 (15,699+14,186+14,716) 752 752 5,65,504 2.76%
/3=14,867
Percent 13,799 (15,619+15,699+14,186) -1,369 1,369 18,74,161 0.736%
/3=15,168
Error 14,612 (13,799+15,619+15,699) -427 427 1,82,329 8.01%
/3=15,039
E% 14,411 (14,612+13,799+15,619) -265 265 70,579 20.41%
/3=14,676
percent 16,232 (14,411+14,612+13,799) 1958 1958 38,33,764 0.423%
/3=14,274
Error 15,603 (16,232+14,411+14,612) 518 518 2,68,324 5.18%
/3=15,085
E% 15,603 = 2,509 =6,631 = 77,16,059 =44.509%

Percent

Formula Calculation Result

= |E| / n
MAD 2,509 ⁄ 8 = 313.625 61

= E2 / (n-1)
MSE 77,16,059⁄7 = 11,02,294 1,504,560

MAPE = E|/A)*100%} / n 44.509⁄8= 5.563 0.34%

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

MOQ 7
 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

MOQ 8
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 6,600 6,600 units

Setup or Order Cost,
210 210 dollar
S
Holding cost, H 3 3 dollar

Operating days per

320 320 days
year, Odp
2DS
EOQ, Q* Q0 = H = 961.249
units

Number of orders
D / Qo = 6.866 times
per year

Length of Order Cycle (Qo / D ) x Odp = 46 days days

Total Cost D = 2,883.747

dollar
TC= S+Q20
H

Q0  

MOQ 9
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 10
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

MOQ 11
CASE STUDY:
Makespan
Average flow time
Average tardiness
Average number of jobs at work center

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

MOQ 12
CASE STUDY:

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

MOQ 13
CASE STUDY: TRANSPORTATION MODELING CS#7

MOQ 14
CASE STUDY: LOCATION PLANNING USING CENTER OF GRAVITY METHOD CS#8

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

𝑥̿ = 3.7

𝑦̿ = 4.1

Draw graph here:

10

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

MOQ 15
MOQ 16