Background Information for Acme Mexico City
Acme Home Improvements, Inc. was founded in 1982 in Raleigh, North Carolina, USA. At the beginning
of 2015, the company had 125 stores along the US East Coast from Florida to Maine. Its annual sales are
currently ~$5,400,000,000 with $280,000,000 net income. The average store is about 100,000 square feet
with an additional 10,000 square feet of outside garden center. The stores typically carry 40,000 different
products from 5,000 vendors worldwide. Major US competitors include Ace, Home Depot, Lowe's, and
TruValue.
In the interests of seeking greater profits and buffering against downturns in the US market, Acme has
determined to follow Home Depot, Ace, and other competitors to Canada and Mexico. In the latter, it has
established, in accordance with Mexican law, a joint venture with local interests, known as Acme Home
Improvements de México, SA de CV ("Acme de México" or "Acme Mexico City"). (SA de CV =
Sociedad Anónima de Capital Variable, a Mexican corporate form.)
There are five major product groups within each Acme store: plumbing and electrical supplies, building
materials, hardware and tools, seasonal and garden/yard items, and paint, flooring and wall coverings.
Each store has a store manager, assistant store manager, bookkeeper, an information systems manager and
an assistant, a manager for each of the five major product groups, customer service employees on the
store floor to assist customers with their purchases, cashiers, receiving/stocking employees, and
maintenance/janitorial employees.
Assignment
Working individually, students will demonstrate competency in operations management by analyzing
three operations management techniques and applying them to improve Acme Mexico City's
operations in an integrated report.
Two of the techniques are mandatory. They are:
Data-driven decision-making aka data analytics
Linear programming
The student will select the third technique from the following list:
Decision support systems
Outsourcing to include offshoring, reshoring, and nextshoring
Sustainable supply chain management
The student will submit a report in that integrates their three analyses and the applications to
Acme Mexico City. Specifically, include an executive summary.
Critical thinking, information literacy, problem solving, systems thinking, and technology fluency are
required.
- techniques, address the following:
What is the general purpose of the technique?
How does or should this help operations in general?
What are the limitations of the technique?
What are the costs involved? What training is needed to use the technique? What else is
needed?
At Acme Mexico City, what is the problem, opportunity, or challenge that this technique
can address?
How will the technique help Acme Mexico City's operations? Why?
What would be the areas that present challenges in the approach (e.g., cost, personnel,
training, culture, technology, management commitment, etc.?)
Within your analysis on linear programming applied at Acme Mexico City, address the
following:
What is the recommended low-cost (not necessarily the minimum cost) customer service
employee daily assignment schedule?
What are your underlying assumptions and any qualitative factors that you believe are
involved?
How might non-typical days affect the schedule?
Also, provide a sensitivity analysis that shows how relaxation of the 50% constraint on the hours
worked by part-time customer service employees might affect the daily personnel costs.
The following information is provided for your use in this linear programming analysis:
To the extent permitted by local law, each Acme Home Improvements store, including Acme Mexico
City, is open from 7 am - 11 pm every day.
Acme Mexico City advance planners in North Carolina have
provided the following table, which identifies the minimum
number of customer service employees estimated to be needed on
the floor of the store each hour of a typical work day:
Customer Service Employees
Time Period
Minimum number needed
on the floor
7am-8 am
10
8am-9am
12
9am-10am
18
10am-11am
22
11am-12pm
22
12pm-1pm
26
1pm-2pm
26
2pm-3pm
26
3pm-4pm
26
4pm-5pm
26
5pm-6pm
28
6pm-7pm
28
7pm-8pm
24
8pm-9pm
22
9pm-10pm
14
10pm-11pm
12
In the interest of cost control, the planners have also imposed a
not-to-exceed maximum of 30 customer service employees on the
floor at any time.
Full-time customer service employees at AMC work a 9 hour
shift (8 hours of work plus a 1 hour meal break) either from 7 am
to 4 pm or from 2 pm to 11 pm. Workers on the 7-4 shift are
assigned an hour-long lunch break at either 11 am or 12 noon.
Workers on the 2-11 shift are assigned an hour-long dinner break
at either 5 pm or 6 pm.
Part-time customer service employees work four consecutive
hours per day and their shifts can start any hour between 7 am
and 7 pm. They receive no meal breaks.
By company policy, which is consistent with Mexican labor law,
the company limits the hours worked by part-time customer
service employees to 50% of the day's total scheduled hours.
Part-time customer service employees earn $500 per day, and
full-time customer service employees earn $1100 per day in
salary and benefits (here, $ = Moneda Nacional, i.e., the Mexican
peso).
Acme operations analysts working in North Carolina, working
with the AMC advance planners, have used linear programming
to propose in accordance with the foregoing factors, an employee
assignment schedule for a typical day.
Background Information for Acme Mexico City
Acme Home Improvements, Inc. was founded in 1982 in Raleigh, North Carolina, USA. At the beginning
of 2015, the company had 125 stores along the US East Coast from Florida to Maine. Its annual sales are
currently ~$5,400,000,000 with $280,000,000 net income. The average store is about 100,000 square feet
with an additional 10,000 square feet of outside garden center. The stores typically carry 40,000 different
products from 5,000 vendors worldwide. Major US competitors include Ace, Home Depot, Lowe's, and
TruValue.
In the interests of seeking greater profits and buffering against downturns in the US market, Acme has
determined to follow Home Depot, Ace, and other competitors to Canada and Mexico. In the latter, it has
established, in accordance with Mexican law, a joint venture with local interests, known as Acme Home
Improvements de México, SA de CV ("Acme de México" or "Acme Mexico City"). (SA de CV =
Sociedad Anónima de Capital Variable, a Mexican corporate form.)
There are five major product groups within each Acme store: plumbing and electrical supplies, building
materials, hardware and tools, seasonal and garden/yard items, and paint, flooring and wall coverings.
Each store has a store manager, assistant store manager, bookkeeper, an information systems manager and
an assistant, a manager for each of the five major product groups, customer service employees on the
store floor to assist customers with their purchases, cashiers, receiving/stocking employees, and
maintenance/janitorial employees.
Assignment
Working individually, students will demonstrate competency in operations management by analyzing
three operations management techniques and applying them to improve Acme Mexico City's
operations in an integrated report.
Two of the techniques are mandatory. They are:
Data-driven decision-making aka data analytics
Linear programming
The student will select the third technique from the following list:
Decision support systems
Outsourcing to include offshoring, reshoring, and nextshoring
Sustainable supply chain management
The student will submit a report in that integrates their three analyses and the applications to
Acme Mexico City. Specifically, include an executive summary.
Critical thinking, information literacy, problem solving, systems thinking, and technology fluency are
required.
- techniques, address the following:
What is the general purpose of the technique?
How does or should this help operations in general?
What are the limitations of the technique?
What are the costs involved? What training is needed to use the technique? What else is
needed?
At Acme Mexico City, what is the problem, opportunity, or challenge that this technique
can address?
How will the technique help Acme Mexico City's operations? Why?
What would be the areas that present challenges in the approach (e.g., cost, personnel,
training, culture, technology, management commitment, etc.?)
Within your analysis on linear programming applied at Acme Mexico City, address the
following:
What is the recommended low-cost (not necessarily the minimum cost) customer service
employee daily assignment schedule?
What are your underlying assumptions and any qualitative factors that you believe are
involved?
How might non-typical days affect the schedule?
Also, provide a sensitivity analysis that shows how relaxation of the 50% constraint on the hours
worked by part-time customer service employees might affect the daily personnel costs.
The following information is provided for your use in this linear programming analysis:
To the extent permitted by local law, each Acme Home Improvements store, including Acme Mexico
City, is open from 7 am - 11 pm every day.
Acme Mexico City advance planners in North Carolina have
provided the following table, which identifies the minimum
number of customer service employees estimated to be needed on
the floor of the store each hour of a typical work day:
Customer Service Employees
Time Period
Minimum number needed
on the floor
7am-8 am
10
8am-9am
12
9am-10am
18
10am-11am
22
11am-12pm
22
12pm-1pm
26
1pm-2pm
26
2pm-3pm
26
3pm-4pm
26
4pm-5pm
26
5pm-6pm
28
6pm-7pm
28
7pm-8pm
24
8pm-9pm
22
9pm-10pm
14
10pm-11pm
12
In the interest of cost control, the planners have also imposed a
not-to-exceed maximum of 30 customer service employees on the
floor at any time.
Full-time customer service employees at AMC work a 9 hour
shift (8 hours of work plus a 1 hour meal break) either from 7 am
to 4 pm or from 2 pm to 11 pm. Workers on the 7-4 shift are
assigned an hour-long lunch break at either 11 am or 12 noon.
Workers on the 2-11 shift are assigned an hour-long dinner break
at either 5 pm or 6 pm.
Part-time customer service employees work four consecutive
hours per day and their shifts can start any hour between 7 am
and 7 pm. They receive no meal breaks.
By company policy, which is consistent with Mexican labor law,
the company limits the hours worked by part-time customer
service employees to 50% of the day's total scheduled hours.
Part-time customer service employees earn $500 per day, and
full-time customer service employees earn $1100 per day in
salary and benefits (here, $ = Moneda Nacional, i.e., the Mexican
peso).
Acme operations analysts working in North Carolina, working
with the AMC advance planners, have used linear programming
to propose in accordance with the foregoing factors, an employee
assignment schedule for a typical day.
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