Rashad Walid Hafez Ahmed Zaki Shoaib Mohammad Khan Robin Albert Carvalho Assignment A1 Statistical Quality Control Introduction In evaluation of the Bayfield Mud Company operations, we have studied the bag weight problem and conducted the necessary analysis. Accordingly, based on our findings, we have discussed the following points in our report and subsequently recommended the appropriate procedures in order to maintain proper quality control:  How did the quality problem at Bayfield occur and who is responsible?  Recommendations on improving or maintaining proper quality control in order to avoid its recurrences in the future.  Various control charts and other relevant data to support our analysis as well as Quality Control Limits for the Sample Means. To measure the process, we have analyzed the samples statistics doing the following calculations: Desired mean: mean ( x) = 50.0 standard deviation (σ) = 1.2 Sample size= 6 The following information was extracted from the table: Upper Range (D4) =2.004 Lower Range (D3) = 0 Mean Range(R-bar) = 3.7 Sigma X = 0.489 At 99.73 – Z=3 X Chart Limits UCL for X = 51.47 LCL for X = 48.53 Therefore, the upper and lower control limits for the Range are: UCL = (2.004) * (3.7) = 7.4148LCL = (0) * (3.7) = 0 I. What is your Analysis of the bag-weight problem? In the given case, Quality control analysis has been done via X-charts and R-charts. X-chart is to control the central tendency of the process. In this case, we refer to the weight of 50-pound bags of treating agents. R-chart is to control the dispersion of the process. In this case, we refer to the range of weight or difference between maximum weight and minimum weight of the bag. Upon the analysis of problems, based on the calculations taken from all three shifts over three days, we can observe that the average weights, ranges, upper and lower limits have been out of control. The results from the statistics show that there was statistical control on the dayshift for the first 2 days, that is, the weight of the bags fell within the operational limits. However, since the problem exists across all the shifts, it is presumed that there might be a problem with the machine itself; possibly a malfunction or gradual deterioration of quality due to machine wear. 2. What procedures would you maintain proper quality control? recommend to Below are our recommendations in order to maintain the proper quality control: Since we understand from the case, that the added night shift was staffed by all new employees who focused only on increasing outputs to meet ever-increasing demand, the first thing we recommend is that Bayfield Mud company should educate all staff to understand that the consistent quality of production is as important as the quantity. High output with high quality should come together. The company should arrange technical and operation training more frequently in order to ensure that the staff operate efficiently. Instead of assigning only new staff on night shifts, experienced staffs should be mixed up with them in order to help smooth operation with desired quality in all three shifts. Also, we recommend setting up monitoring process by most experienced foremen to review and control the quality of product during production. Moreover, the company should offer extra incentives for the staff that produce every product within control limit of standard weight of bags- 50 pounds. This can be considered as another way to reflect staff performance. QANT 610 Assignment A3: Supply Chain Management Submitted on 28th November 2012 Prepared by Shoaib Mohammad Khan Ahmed Zaki Rashad Walid Hafez Robin Albert Carvalho INTRODUCTION The main objective of supply chain management is to build a chain of suppliers that focuses on maximizing value to the ultimate customer. There can be a low cost strategy or a quick response strategy or a differentiation strategy of supply chain management. But supply chain management carries a huge amount of risk with itself too as problems in the supply chain can react to disruptions in processes, controls and environment. QUESTION 1 Dell uses the direct sales method for distribution primarily via the Internet. Options displayed over the Internet allow customers of Dell to select from a wide range of choices and select either recommended product configurations or customize them. The Assembly begins once the orders are placed. And for managing the supplier side, Dell has made special Web pages from suppliers where suppliers can view orders for the components they produce and also check the current level of inventory of that component with Dell. This allows the suppliers to plan based on the actual end customer demand and this in turn allows Dell to build-to-order for its customers. Thus, an exceptional supply chain network is formed from the supplier of the components to Dell. QUESTION 2 Through the direct sales method customers place their orders overs the Internet and Dell starts with the assembly as soon as it receives the order and the product cycle for Dell is very short if compared to others in the industry. And Dell’s price is also cheaper as compared to retail stores because there aren’t any carrying or holding costs of the raw material or the finished product. Dell’s model also has cash flow advantages with direct sales cutting the share of the distributor and retailer margin and thus allowing Dell to increase its own margin and in collecting the accounts receivables too Dell is very quick as it collects payment in a matter of days after the products are sold. And to improve the operations performance Dell has designed its order processing, products, and assembly lines in such a way so that customized products can be assembled in a matter of hours. This allows Dell to postpose its assembly until an order is placed and Dell maximized the benefit of this postponement by focusing on new products for which demand is difficult to forecast and thus Dell is better able to match supply and demand. QUESTION 3 The main disadvantages of Dell’s direct sales model are that it results in higher outbound shipping costs than it would have been if Dell had been selling though distributors and retailers. Dell sends its products directly to the customers from its plant after assembly and many of these orders are small mostly consisting of one laptop order while manufacturers selling through distributors ship their finished goods through economies of scale, using large shipments via truck to warehouses and retailers, with the end use providing the final portion of the delivery. QUESTION 4 Dell is able to compete with a retailer who already has a stock with Dell being cheaper in price as the retail stores have additional costs because of their brick and mortar model. The brick and mortar model in simple words describes the physical presence of the business while Dell works from virtual space. Competing firms have already assembled products filling their distribution channels and Dell starts to manufacture a product only after it has received an order for it. Because of this low level of inventory, Dell is able to operate its business with negative working capital because it manages to receive payment before it pays its suppliers for components and because of Dell’s built to order model Dell has designed its order processing, products, and assembly lines in such a way so that customized products can be assembled in a matter of hours whereas the competitors have large product cycles in months. QUESTION 5 Bullwhip effect is when stable demand becomes lumpy orders through the supply chain. It refers to a trend of larger and larger swings in response to changes in demand. Dell has constructed special Web pages for suppliers, allowing them to view orders for components as well as current level of inventory of those components at Dell. This allows suppliers to plan according to the customer demand. Dell’s supply chain deals with the bullwhip effect by always keeping enough stock of components with itself so that it can manufacture a product as soon as the order comes in and the product is ready to get shipped. Dell also has the ability to increase production on a short notice as it has designed its order processing, products, and assembly lines in a very strategic way so that the product cycle is very short thus Dell is able to cater with the changes in demand very conveniently. 2015 QANT 610 – OPERATIONS MANAGEMENT A2: SEVEN ELEVEN JAPAN CO – SUPPLY CHAIN MANAGMENET CASE STUDY 1.0 Abstract 2.0 Introduction to Seven Eleven 3.0 Seven Eleven Supply Chain Strategy 4.0 Supplier Management 5.0 Information Management System 6.0 Analysis of Business Issues 7.0 Analysis of Opportunities and Impact on Management Strategy 8.0 Evaluation of SCM Principles 9.0 Conclusion 10.0 References QANT 610 –A2 Seven Eleven SCM…….Page 1 of 11 1. Abstract In today’s competitive world in the consumer goods, the manufacturers strive for their products to reach final customers before they turn their heads to the rival’s ones. This research attempts to understand and investigate how 7-Eleven company manages its supply chain activities, distribution network and applying information technology to achieve competitive advantages. The purpose of case study is to analyze the various strategies adopted by Seven Eleven and the way Seven Eleven manages and operates its retail convenience business focusing on several aspects which support 7-Eleven’s activities especially distribution networks, strategic outlook and information system and how they contribute to competitive advantages. The case also addresses the various challenges encountered by seven eleven and their innovative business model to be a successful and more competitive in retail industry. 2. Introduction to Seven Eleven Japan’s largest convenience store chain, was established in 1973 by Masatoshi Ito. Seven Eleven has been a strongly recognized brand in the industry due to a number of contributing factors. Its strategy was to differentiate his company in the areas of distribution and information systems. Having an effective and efficient way of utilizing these systems is what allowed the company to grow and become a major player in the market. Following a market-dominance strategy, Seven Eleven developed a franchise system in which responsibilities were divided between the company and third parties. This enabled a rapid growth rate and a high dominance in the market, which consequently increased distribution efficiency, and also created a high barrier of entry into the market. Along with this success, the company inevitably faced a number of challenges and complications. In expanding to new regions, they faced the challenge of having to cater specifically to each local market they operate in. This required a broad understanding and examination of the market’s demands. Seven Eleven later expanded the variety of services they offer in their stores; the goal was to make it a one-stop shop. These services included ATM installation, as well as enabling customers to pay their bills in the store. In the year 2000, Seven-Eleven set-up an e-commerce company, 7dream.com. QANT 610 –A2 Seven Eleven SCM…….Page 2 of 11 The company has been consistently adapting and utilizing change to their advantage. 3. Seven Eleven Supply chain Strategy Seven-Eleven Japan is adapting the Keiretsu network strategy to manage its supply chain. The approach being used is the market-dominance strategy in their supply chain which focuses more on micro-matching the demand where SevenEleven Japan already exist. The clustering concept in the market-dominance strategy in Seven-Eleven Japan allowed the company to achieve six advantages that are: 4. 1- Boosted distribution efficiency 2- Improved brand awareness 3- Increased system efficiency 4- Enhanced efficiency of franchise support 5- Improved advertising effectiveness 6- Prevented competitors’ entrance into the dominant area Supplier Managment Following Keiretsu networking in their supply-chain, Seven-Eleven Japan was managing its franchise system through a strict acceptance procedure as well as a set of shared responsibilities that involved training the shop owner, paying for system operations and utility costs. On the other hand, Seven-Eleven Japan is expecting the franchise owner to operate and manage the store, hire and pay staff, order supplies and provide customer service. In addition to that, 7-eleven Japan also controlled the stores in both area and layout ensuring each store will have sufficient stocks to cater for local demands. 5. Information Management System Creating a solid infrastructure is what enabled the company to gain competitive advantage in terms of supply chain management. Firstly, all supply chain members are linked through the company’s total information system. Second, having all inventories at one place can be beneficial when sorting out deliveries. QANT 610 –A2 Seven Eleven SCM…….Page 3 of 11 The distribution center divides the inventory based on temperature, and allocates it to the suitable temperature-controlled truck. This helped cut transportation costs since it decreased the number of trucks required daily. This is referred to as the Combined Delivery System. The area dominance strategy makes it easier for an aggregation of deliveries that can be delivered in one trip to multiple stores. “Since Japan’s geographic regions are heterogeneous in weather, events, economic situations, demographics and industrial composition, collecting a small sample of POS data from each region would not reveal meaningful demand patterns. By contrast, the Dominant Opening Strategy allows SEJ to extract enough data from each small homogenous area to detect significant demand patterns, and finally develop a consistent plan applicable to all stores in the area.” (Terry P. Harrison, 2006) Integrating product sourcing, sorting and distribution is an essential factor in making this system gain economies of scale in logistics. Since each component this chain is connected and closely knit, elements tend to be reliant on one another. While integration has been proven to work successfully for the company, it can also become a setback in some cases. If one component fails, this will create a domino effect and cause the entire network to collapse. Therefore, while keeping in mind the advantages this system has t offer it also has its downsides. Also, cooperation between members is vital in data-rich supply chain management. The POS system is helpful in creating an analysis that can be referred back to by store managers while making orders. This system generates constructive feedback for continuous improvement. All components mentioned above aim in creating the closest match between the company’s demand and supply. 6. Analysis of Business Issues A convenient store chain attempts to be responsive and provide customers what they need, when they need it, where they need it. What are some different ways that a convenient store supply chain can be responsive? What are some risks in each case? Looking at the attempt to be responsive, Seven-Eleven is a good example of that being able to do so by their variety of products and the intensive distribution of their stores which are equipment which best in class IT system cater for QANT 610 –A2 Seven Eleven SCM…….Page 4 of 11 replenishing their stocks (SKU’s). However, the associated risk to that is basically to do with having all of these operations exist as long as the consumer is available. If a bulky demand i.e. a company leaves the area, then an operation or two in Seven-Eleven ideally will find it difficult to overcome the gap. Seven Eleven’s supply chain strategy in Japan can be described as attempting to micro-match supply and demand using Rapid replenishment. What are some risks associated with this choice? I believe this micro-matching approach is to avoid any stock-out issue caused in the occasion of having up-normal purchases of let’s say one item by irregular consumers in which will impact the regular consumers to lack this item. SevenEleven assumes this will affect negatively their customer service quality. Another reason could be to avoid last minute surprises i.e. delay in arriving stocks caused by transportation getting jammed in traffic. What has seven eleven done in its choice of facility location, inventory management, transportation, and information infrastructure to develop capabilities that support its supply chain strategy in Japan? Following the area dominance strategy, stores are densely located in specific areas, which are a great advantage in terms cutting on transportation costs; it also contributes to rapid replenishment. Having a distribution center creates a centralized structure in order to facilitate an efficient distribution network. The total information system is closely linked to the POS system; store managers use the graphic order terminal to place orders, and using previous POS analyses determine the demand level of a particular item. By doing that, the company avoids bearing costs of obsolete inventory. The company has created an infrastructure in which the elements are closely linked to create an efficient and well-functioning system. Seven Eleven does not allow direct store delivery in Japan, with all products following through its distribution center. What benefit does seven eleven derive from this policy? When is direct store delivery more appropriate? Direct store delivery (DSD) would lower the utilization of the outbound trucks from the Seven-Eleven DC. It would also increase the receiving costs at the stores because of the increased deliveries. Thus, Seven-Eleven forces all suppliers to come in through the DC. DSD is most appropriate when stores are large and nearly-full truck load quantities are coming from a supplier to a store. This was the case, for example, in large U.S. Home Depot stores. For smaller stores it is almost always beneficial to have an intermediate aggregation point to QANT 610 –A2 Seven Eleven SCM…….Page 5 of 11 lower the cost of freight. In fact, Home Depot itself is setting up these intermediate facilities for its new stores that are often smaller. What do you think about the 7dream concept for seven eleven Japan? From a supply chain perspective is it likely to be more successful in Japan or the United States? Why? The 7dream concept is more suited for Japan than the United States. It is also a great way to maximize the benefit of the existing distribution network. Deliveries can be taken along with the usual deliveries to a specific store. Considering the frequency of customer visits in Seven-Eleven Japan, storage should not be an issue. Since the distribution structure and the store density in the United States is different, this concept might not function as well as it would in Japan. This is due to cultural and lifestyle differences in each economy. Seven Eleven is attempting to duplicate their successful Japanese supply chain structure in the United States with the introduction of CDCS. What are the pros and cons of this approach? Keep in mind that stores are also replenished by wholesalers and DSD by manufacturers. Seven Eleven stores in U.S. is much lower density when compared to Japan and also it is compounded by the fact that seven eleven stores are getting both direct store deliveries as well as wholesaler deliveries to its stores and thus setting up its own DCs doesn’t allow seven eleven to get the same level of transportation aggregation as it gets in Japan. Its own distribution system would help more if all wholesaler deliveries and direct store deliveries were stopped and routed through the DC. Even then, having its own distribution system would add much less value than in Japan given the lower density of stores and larger distance between stores. Pros: Ensure Fresh supply of items and Operational efficiency Cons: Wholesalers may have issues because of these distribution centers Manufacturers may prefer direct store delivery as they have more control here The United States has food service distributors like Mclane that also replenish convenient stores. What are the pros and cons to having a distributor replenish convenience stores versus a company like Seven eleven managing its own distribution function? One can contend that a distributor brings much more value to the table in the United States relative to Japan. Given the lower density of stores, a distributor is able to aggregate deliveries across many competing stores. This allows a QANT 610 –A2 Seven Eleven SCM…….Page 6 of 11 distributor to reach levels of aggregation that cannot be achieved by a single chain such as Seven-Eleven. The big disadvantage to having all deliveries done through a distributor is that Seven-Eleven is unable to exploit having a large number of stores. In fact, it may be argued that going through the distributor has Seven-Eleven subsidize deliveries to competing smaller chains that may also be using the same distributor. 7. Analysis of Opportunities and Impact on Management Strategy Information system played vital role for Seven eleven employees to collect and analyze data with intelligent tools in order to measure the local store performance and to facilitate the business strategies across all location, store managers uses digital capabilities to enhance the existing roles & responsibilities. Managers and employees at individual stores are requested to monitor customer behavior, uncover trends in historical sales data, and even assess weather forecasts for possible insight in order to use these data to drive inventory management utilizing Retail Information System (RIS) and managers receive regular feedback concerning the outcome of his or her respective decisionmaking.The process helps to reinforce store managers’ decision-making abilities and, at times, can lead to one-on-one counseling for a greater understanding of inventory strategies. The technologies like POS (Point of Sale), touch screen system has improved collaboration between leadership and store managers in allowing employees to analyze customer activity instead of facilitating backroom tasks and provided greater insight on the popularity of products and to determine product ran out of stock ahead of time. Seven eleven is emphasizing on the doctrines of “Forecasting, not ordering” by involving their employees and managers with the help of field consultants to forecast the needs of customer requirement based on current conditions and also it shares the shopping cart level data with suppliers and distributors to determine what to stock and supply to local Seven Eleven stores by the distributors. Seven eleven depends on individual stores to analyze the preferences of customers and act on them by the theme of “what customers’ needs before they need it. This process is facilitated by managers and employees that understand the customers on a first person basis as well as technology that provide information that can only be gathered by workers placed in local convenience stores. QANT 610 –A2 Seven Eleven SCM…….Page 7 of 11 8. Evaluation of SCM Principles The combination of demand chain and supply chain management with the common platform: while supply chain management (SCM) is based on the improvement of efficiency and productivity, demand chain management (DCM) is more proactive method to stimulate potential customer’s demands by offering differential products and services in the multi-channel mix. SEJ pursues the synergy of both chain managements to satisfy customer demands as well as achieve co-prosperity with suppliers, believing that the fundamental role of retailers is to link the demands of customers and suppliers by developing and providing reasonable and high quality products ( as stated below fig). The distribution systems of Seven-Eleven were re-engineered and the Combined Distribution Centers have been introduced by the company to better manage the flow of products into the stores. There has been useful advantage of SevenEleven upon CDC and DSD as the centers allow smoothing of distribution operation to the stores and the provision of better quality and better information on supply and deliveries is available and there was control of the supply chain as achieved. QANT 610 –A2 Seven Eleven SCM…….Page 8 of 11 Since 1976, SEJ has been developing a streamlined distribution system to efficiently integrate product supplies. The company established the combined delivery system, whereby the same kind of products coming from different suppliers can be centralized in to 223 combined delivery centers (CDC’s). The combined distribution system allows products from different suppliers to be loaded on the same trucks for delivery to Seven Eleven stores. Combined distribution consolidates product shipment from manufacturers to store at similar optimum temperatures. In 22 years, SEJ has reduced the average number of vehicles visiting each store from 70 a day in 1975 to ten a day in 1998 (as stated below diagram). This effort contributes not only to the efficiency of delivery but also reduces truck emissions and traffic congestion. QANT 610 –A2 Seven Eleven SCM…….Page 9 of 11 9. Conclusion This thesis aims to explore and describe how 7-Eleven managed and operated its retail convenience business in several aspects, strategic synergies, distribution network and Information Management system, which support the 7Eleven’s activities and how they contribute the competitive advantages to the firm as mention in the purpose. The case study is employed to give an example of a retail convenience store business and its operation linkages, internally and externally. The case study concluded that by applying the synchronized strategies between the supply chain network with manufactures / suppliers and innovative business model leads to supply chain benefits and competitive advantage for retail firm. The applications of information Management system and Distribution Centers enhance supply chain capabilities, reliability, and dependability which result in better service and market performance. They are also the keys that facilitate the operations of supply chain and retail store. QANT 610 –A2 Seven Eleven SCM…….Page 10 of 11 10. References o Terry P. Harrison, H. L. (2006). The Practice of Supply Chain Management: Where Theory and Application Converge. New York: Springer Science & Business Media. o 7-Eleven, Inc. corporate website. “About Us.” http://corp.7-eleven.com/AboutUs/ tabid/73/Default.aspx o “7-Eleven, Inc. Case-SMU.” rsethuraman.cox.smu.edu/mktg6229/7Eleven%20Case-SMU.doc o Baseline Magazine. Nash, Kim S. “What’s In Store for 7-Eleven.” November 1, 2002. http://www.baselinemag.com/c/a/ProjectsDataAnalysis/Whats-In-Store-for-7Eleven QANT 610 –A2 Seven Eleven SCM…….Page 11 of 11 QANT 610 Assignment A4: Aggregate Planning (Cornwell Glass Case Study) Submitted on 14th November 2012 Prepared by Robin Albert Carvalho Page 1 of 5 I. Introduction: Aggregate Planning is the most essential part of Production and Operations Management (POM). If the demand for a company product was absolutely stable, there would be no need for aggregate planning. The company can develop a production process and a workforce level that would produce exactly the amount demanded every month in a repeating cycle while maintaining practically no inventory. However, this is seldom found to be true and the demand mix among the products keeps on fluctuating over the time. This leads to the company to create production, inventory and the workforce plans far enough in advance to satisfy the anticipated demand in a cost effective manner. The plan comprises of deploying the amount of workforce in a regular and overtime period, changing inventory levels and/or subcontracting approach with their most effective use that produces the required output and reduces the cost of the production; achieving the maximum profit. The objective of aggregate planning is to meet forecasted demand while minimizing cost over the planning period. Aggregate planning is the key to managing change in POM. The economical and optimal balance between the changing patterns of customer demand and the plans for providing production resources, define the successful aggregate planning. It is a model that combines forecasts and costs so that scheduling decisions can be made for the planning period. Since the aggregate plan is based on satisfying expected intermediate term demands, it is necessary that accurate forecast of these demands shall be made. Due importance must be given to seasonal factor while arriving at forecasts. In addition, material prices, labor wages, subcontracting rates, holding cost as well as carrying costs which affect the optimal plan must be properly considered. Fully loaded facilities and minimizing overloading and under-loading reduce the overall cost. The aggregate planning can be achieved by applying capacity option as well as demand option. However, the mixed strategy combing the different options is the best way to achieve minimum cost. In the given case, “Cornwell Glass”, a glass producer for automobile industry has its annual demand forecast prepared based on their sophisticated forecasting system that considers the demand pattern due to seasonal changes and long term trends. The case provides the variable Page 2 of 5 costs which may influence the company while selecting the best strategy using aggregate planning process in order to administer the business at lowest possible cost. II. Different Aggregate Plans and analysis: In order to find the best fit production schedule for Cornwell Glass, following are the plans studied with their feasibility and cost comparison. Demand option is considered as a level strategy in order to match the output rates to demand forecast for each period by adopting backordering during high-demand period.  Use a constant workforce & produce similar quantities each time period  Use inventories and backorders to absorb demand peaks & valleys Capacity option is considered as a chase strategy by keeping the daily production uniform for better quality and productivity through varying workforce size by hiring and layoffs, also varying production rate through overtime or idle time. Moreover, subcontracting option has also been verified.  Minimize finished good inventories by trying to keep pace with demand fluctuations  Matches demand by varying either work force level or output rate a. Varying production rate through overtime and subcontracting: b. Varying workforce size by hiring or layoffs: Mixed Strategy or Hybrid Strategy: (Level + Chase Strategy)  Build up inventory ahead of rising demand and use backorders to level extreme peaks  Layoff workers during lulls  Subcontract production or hire temporary workers to cover short-term peaks  Reassign workers to preventive maintenance during lulls Data provided: o Annual demand forecast for the period of 2nd week of April through 1st week of April subsequent year. Page 3 of 5 o The maximum production capacity of the company = 1,900 pounds of glass per week and currently production is working at full capacity; i.e. 1,900 units. o The current inventory is 73 units. o The holding cost for glass is $.12 per pound per week. o The cost of a late order is $20 per pound per week late. o The overtime is limited to 250 pounds per week. The overtime costs $8 per pound more than glass manufactured during regular time (Assume the unit cost during regular time production = $10 per pound; therefore, the overtime cost equals $18). o Subcontracting is limited to 2,000 pounds per week. Subcontracting cost is $2 more per pound than glass that is produced during overtime = $20. o Hiring cost = $5.63 per pound o Layoff cost = $15.73 per pound The case has been analyzed using different planning options as specified above, to achieve the lowest total cost by decreasing the holding cost and avoiding loss of sale in order to meet the estimated demand. Attached herewith are the results obtained from the POM software for various options. Taken into account the backorder allowance outweighs the loss of sale, three key options are considered. Following are the options with their total cost: Sr. No. Aggregate plan Total Cost 1 Smooth production (Avg. net demand) $849,077.10 2 Chase current demand (Let workforce vary) $104,575.10 3 Constant regular time, then OT and subcontracting $82,858.08 In plan No.1 (Smooth production - Avg. net demand), although at the end of week 52, the company can manage with zero inventories and zero backorders by using its own human resources in regular and overtime, the cost incurred due to shortage (backorder) is significant that reflects in high total cost amounting to $849,077.10. In plan No.2 (Chase current demand - Let workforce vary), while chasing the demand, the regular time production is limited to the demand of that particular week in order to avoid any Page 4 of 5 holding cost. Consequently, it leads to extra overtime and subcontracting cost in succeeding weeks. However, the total cost is substantially reduced to $104,575.10 as compared to plan No.1. In plan No. 3 (Constant regular time, then overtime and subcontracting), the production in regular time has kept constant to its maximum limit which adds the holding cost during initial weeks but later helps using that stock in the successive weeks; resulting the minimum usage of labor hours during overtime and subcontracting. In this plan, although there will be 614 inventories will remain unsold, considering its meager holding cost as compared to the minimum total cost of $82,858.08 against two other plans, this is the most favorable option. III. Conclusion: I recommend that Cornwell Glass should adopt the plan No.3 as the optimal production plan that gives the lowest total cost amounting to $82,858.08. The company should use its own human resources in regular time and then consider additional production during overtime and subsequently, subcontracting it whenever deemed necessary in order to chase the demand. The particular strategy will maximize the profit with minimum input and cost. It is clear from the above example how the aggregate planning plays pivotal role in achieving the company goal in cost-effective manner. Wrong selection of the plan may lead to wastage/improper use of resources, excess/shortage of inventory etc. The success of the organization is directly linked with how efficiently the medium range (approx. 3-12 months) planning is done. Works Cited:  Aggregate planning/ Wikipedia, the free encyclopedia http://en.wikipedia.org/wiki/Aggregate_planning#Hybrid_Strategies  Production Planning and Scheduling. MS-53. Vol.4 Indira Gandhi National Open University/School of Management Studies Page 5 of 5 Aggregate planning Quant 610 Aggregate planning for an automobile glass producer manufacturer “Cornwell”. POM Using three aggregate planning strategies to analyze 1) Chase strategy 2) Level scheduling and 3) mixed strategy. forecasted table Week April May June July August September Demand 15 1,829 22 Week November Demand 4 1,864 1,820 11 1,989 29 1,887 18 2,098 6 1,958 25 2,244 13 2,011 2 2,357 20 2,063 9 2,368 27 2,104 16 2,387 3 2,161 23 2,402 10 2,258 30 2,418 17 2,307 6 2,417 24 2,389 13 2,324 1 2,434 20 2,204 8 2,402 27 2,188 15 2,385 3 2,168 22 2,330 10 2,086 29 2,323 17 1,954 5 2,317 24 1,877 12 2,222 3 1,822 19 2,134 10 1,803 26 2,065 17 1,777 2 1,973 24 1,799 9 1,912 31 1,803 16 1,854 7 1,805 23 1,763 30 1,699 December January February March April October 7 1,620 14 1,689 21 1,754 28 1,800 Chase Strategy For this strategy, we have found through analysis as per the following table: Regular Time production Overtime production Subcontracting 96792 0 0 7047 8 $56,376 3705 10 $37,050 0 0 0 Hiring 547 5.63 $3,079 Firing 547 15.73 $8,604 Ending Inventory Total cost $105,109 Level plan Steady production, production is unified No hiring nor firing the firm has to change the inventory level to reach the demand forecast demand forecast Breakdown of costs Regular time 96792 $0 0$ 6023 $8 $48184 Subcontracting 3335 $10 $33350 End inventory $0.12 $1324.08 production Overtime production Total 11034 $82,858 Mixed strategy it combines both Chase and level plan strategies overtime and subcontracting are used in this strategy to supply the demand Conclusion The level plan came up with total much less than the chase plan as result for these calculation the Cornwell glass firm should go for it A1. Statistical Quality Control Project: Study the Bayfield Mud Company case appearing at the end of Supplement 6 or a similar case assigned by the instructor containing a large data set. Prepare various control charts and identify the cause of the process going out of control. Student team should discuss role of various people at Bayfield who can improve quality. In addition to the answering questions in the case, you should make a clearly present a plan to ensure future quality at Bayfield. Your team is expected to write 4 page paper (supplemented by Control Charts as exhibits) which summarizes your analysis and conclusions. For the purpose of measuring the learning goals each student team project will receive 4 scores. Score 1: The quality of technical analysis (MBA -1M); Score 2: The appropriateness and scope of data analysis and observations (MBA-2M); Score 3: The relevance of technical analysis leading to effective management decisions (MBAMGMT); and Score 4: The demonstration of collaborative decision making and empowering participants (MBA – 3G). A2. Supply Chain Management case study: Based on the “Dell’s Value Chain” Case appearing at the end of the “Supply Chain Management” chapter of the textbook and the references sited at the end of the case or a similar case assigned by the instructor containing a large data set, answer the questions raised in the case study. In addition to answering these questions, you must identify some of the other SCM initiatives undertaken by Dell and other companies. Your 4 to 6 page paper should present the big picture of Supply Chain Management and the marketing implications of engaging in SCM. For the purpose of measuring the learning goals, each paper will receive 3 scores. Score 1: The quality of the analysis of business issues and overall conclusions (MBA -3M); Score 2: The analysis of opportunities and impact on management strategy (MBA-MGMT); and Score 3: The evaluation of SCM principles on the strategy for managing distribution channels (MBAMRKT). A3. Aggregate Planning Assignment: Each student will be required to analyze various Aggregate Planning strategies which could be used by “Cornwall Glass” or a similar case assigned by the instructor containing a large data set. To access this case study, go to www.prenhall.com/heizer and select the companion website for the textbook. Click on the “Additional case Study” link for chapter 13. Use the data for Cornwall Glass case and evaluate aggregate production plans using different strategies. Evaluate economics and feasibility of each strategy and recommend the best strategy. Submit a 3 to 5 page report. You may submit an Excel file with your report if you want. For the purpose of measuring the learning goals each student team project will receive 4 scores. Score 1: The scope of technical analysis and comparisons (MBA -1M); Score 2: The quality of data analysis, assumptions and observations (MBA-2M); Score 3: The accuracy of evaluations, decision making, and conclusion (MBA-QANT); and Score 4: The financial analysis of different strategies and recommendations (MBA – FINC).
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