Mike's Plan $($Exhibit $5)$

Mike thought that ESC should require a minimum order quantity of $5$ custom shirts of a given size, and devised his plan accordingly. He believed that the current production facilities could easily accommodate the increased volume represented by the custom shirt line. The new cutting machine could be set up next to the existing cutting machine, and would be run by the one new worker dedicated to that machine. Regular shirts would be cut on the old machine, while custom shirts would be cut on the new machine. Batches of custom shirts would be sewn with batches of regular shirts. In order to shorten the lead time and to accommodate batches of $5$ custom$-$sized shirts

$1$ Workers worked from $8$:$00$ AM to $5$:$00$ PM with one hour of unpaid lunch and no formal breaks. Workers took informal breaks as desired and as allowed by their workload.

Planning the Custom Shirt Line

Collier knew that the introduction of a custom$-$sized shirt line would require some changes to the manufacturing process. As a first step, Collier ordered a new "low$-$ply$"$ laser cutting machine. The new cutting machine was small: it could cut only one shirt pattern at a time out of up to $5$ layers of cloth. However, this new machine was extremely fast: the entire process of laying out a pattern and cutting the shirts took only $2\mathrm{.}5$ minutes. Cutting only one pattern at a time rather than $8$ would result in a higher scrap rate$$Collier estimated that material costs for custom$-$sized shirts would be about $10\%$ higher than for standard$-$sized shirts. Collier expected that any plan for manufacturing custom$-$sized shirts would require hiring a new worker to operate the new machine; the existing cutting machine would continue to be operated by a dedicated team of $4$ workers.

Collier wanted to study several options for designing the manufacturing process for the custom shirt line. He asked two of his managers, Mike and Ike, to come up with plans for incorporating production of custom shirts into the existing manufacturing process. He specified only that the manufacturing lead time for the custom shirts had to be less than $5$ working days, and the plans should initially allow for production of $2,000$ custom shirts per month. The factory was currently producing standard$-$sized shirts at a volume of $16,000$ per month. The production volume of the standard$-$sized shirts was expected to remain the same. He also cautioned Mike and Ike against making large capital expenditures before this foray into the custom$-$shirt market had proven to be successful.coming through the factory, Mike proposed reducing the batch size for all shirts from $60$ to $5$ shirts. He also thought that it would be prudent to add extra batches of buffer inventory at each station after cutting, for a total of $6$ batches per worker.

Ike's Plan $($Exhibit $6)$

Ike, on the other hand, thought that custom$-$shirt production should be kept separate from the production of standard$-$sized shirts. He proposed that all of the custom shirt operations, from cutting to packaging, be done on a separate assembly line. Because there was excess capacity in the factory, he proposed moving $1$ worker from each sewing operation, $1$ worker from inspection, $1$ worker from ironing, and $1$ worker from packaging to the new line. In addition, $12$ sewing machines and one ironing machine could be moved from the regular shirt production to the custom shirt line. On the new line, each operator would perform the same operation he or she had been assigned in the current factory, in the same sequence. Each operator would work on one shirt at a time, with an average of $3$ shirts for each of the $15$ workers on the line $($post$-$cutting$).$ As in Mike's plan, one new worker would be hired to operate the new cutting machine. Ike planned to leave the regular shirt production process unchanged, except that each operation would be performed by one less worker $($except cutting$).$ He thought that the reduction of people and equipment in the regular shirt production area could easily be made up by asking the shift to work a small amount of overtime if necessary. Planning the Custom Shirt Line

Collier knew that the introduction of a custom$-$sized shirt line would require some changes to the manufacturing process. As a first step, Collier ordered a new "low$-$ply$"$ laser cutting machine. The new cutting machine was small: it could cut only one shirt pattern at a time out of up to $5$ layers of cloth. However, this new machine was extremely fast: the entire process of laying out a pattern and cutting the shirts took only $2\mathrm{.}5$ minutes. Cutting only one pattern at a time rather than $8$ would result in a higher scrap rate$$Collier estimated that material costs for custom$-$sized shirts would be about $10\%$ higher than for standard$-$sized shirts. Collier expected that any plan for manufacturing custom$-$sized shirts would require hiring a new worker to operate the new machine; the existing cutting machine would continue to be operated by a dedicated team of $4$ workers.