The Production manager of the Good Time Wine Rack Company is retiring and the Managing Director is
Question:
The Production manager of the Good Time Wine Rack Company is retiring and the Managing Director is looking to replace her. You are preparing a work schedule as youare hoping to be offeredthe position of Production Manager;you know that the ManagingDirector is principally concerned withthe budget.
Feasibility of Schedule:
You may end up with net loss by your schedule. Since it is on-going business, the loss on this week may be made up by operations on following weeks. So you do not need to worry about the loss. However, it is critical for you to have a feasible schedule. If your schedule is not feasible, then you mayhave your gradereduced by 30%.
Submission Documents:
You need to submittwo documents: a case reportand the Excel template file. Submit both files to the Canvas. The case report should include the approach to solve the project, the summary of your schedule, your final profit (or loss), and any comments, if necessary. The number of pages of the report should not exceed three.
Introduction
Welcome to the wine cellar business. As Production Manager of the Good Time Wine Rack Co., you supervise a small factory which builds custom bottle storage systems. These storage systems, or "wine racks", have been installed throughout the country. Your typical customer is a private wine collector, usually wealthy, who is either building or remodeling a wine cellar to store his or her own collection. Howard Stark, the owner ofthe Good Time Wine Rack Co., closes each deal personally and turns the order over to you to build. The order then becomes a "job" released into your factory, and is usually referred to by the name of the customer for whom it is being built. Howard promises that the job will be shipped by a certain date, although customers are happy to receive their cellars earlier, if possible.
The Good Time Wine Rack Factory is a modest sized job shop located in an industrial park adjacent Lincoln, NE. You currently have four crew members staffing the factory:Steve Rogers (senior employee and master carpenter), Natasha Romanoff, Tony Stark (the son of your boss, Howard Stark),and Bruce Banner.Your job as Production Manager is to schedule the activities of these four employees, as well as keep them supplied with whatever materials they may need.
Wine racks are made from clear-heart redwood, which is lumber cut from the center of a redwood tree. (Redwood is the preferred lumber of wine cellars, because it is highlymildew and insect resistant. Redwoodgets its unique color from an acid which makes it unappetizing to most pests.) Individual racks consist of horizontal and vertical pieces fastened into ladder-shaped sub-assemblies, which are then held in place by horizontal bands of trim across the front and back of the rack.
The wine racks pictured above are twenty-bottle high, single depth racks. Four columns of wine rack are visible in the break-away section of finished racking on the right. Note that attaching the horizontal trim in the third step above is not done in your production shop at the Good Time Wine Rack Company. Rather, the horizontal trim is created to order at your shop, and shipped separate from the ladder shaped sub-assemblies such as the one in the center of the picture. Step Three of this drawing is actually completed once all these items are delivered to the wine cellar location. If Step Three were completed in your shop, most finishedwine racks would be too big to ship, and wouldn't fit through the door of the wine cellar even if they could be shipped.
Building Good Time Wine Cellars
Aside from Howard Stark'spersonalized sales techniques, the only thing "custom" about a "custom" wine cellar is the horizontal trim which holds the rack sub-assemblies together.All customers' orders are some combination of four basic types of sub- assemblies: twenty-bottle high/single bottle deep racks, twenty-bottle high/double deep racks, twenty four-bottle high/single bottle deep racks, and twenty four-bottle high/double deep racks. These sub-assemblies, in turn, are made of rack parts, cut from your available lumber.To accomplishhave enoughracks required a job (one customer's order), you must:
- Make sure you haveenough rack parts.for that
- Build the racksrequired by the order.
- Make the custom trim forthat job.
- "Pull" the racks from inventory, inspect, and document the job.
- Pack the job forshipping.
A typical job is named after the customer, although it requires a job code number in order for youto createyour schedule. For example, the following jobs are waiting to be scheduled: Table 1
Howard does not always promise reasonable shipping dates! As production manager,you do your best! For ease of calculation, we assume that the wine racks are manufactured as a unit of 10 columns. For example, if a customer orders 60 columns, the deliverable will be 6 of 10 columns.
Scheduling Requirements at the Good TimeWine Rack
As Production Manager, you must make a weekly activity schedule for each of your four employees to follow.
As described previously, somebody makes parts, parts become racks, racks and trim get inspected and turn into cellars, and cellars get packed. When figuring out exactly who is doing what, there are two issues that you must be aware of:
- Is the employee qualified to do the activity assigned?
- Does the employee have available what the employeeneeds to completeone hour's worthof the activity assigned?
If you make a mistake... Suppose an employee is assigned an activity that he or she is not qualified to complete. Instead of completing that activity, the employee will be IDLE for that time. As soon as you assign something the employee can do, the employee will begin working again.
Should you assign a qualified employee a particular activity during a particular hour, but there aren't enough materials available at the beginning of the hour to complete an entire hour's worth of that activity. The employee will instead be IDLE for the entire hour. In addition, the employee will continue to attempt that activity the next hour, and the next, until the necessary materials show up and he or she is successful at completing your request. In essence, the employee's entire work schedule is "pushed back", or delayed, by that idle time. Note how this differs from the "unqualified" case. The simulator will attempt your instruction for up to five hours before abandoning the original activity and continuing on to the next hour's instruction.
How to code your schedule... There are essentially eleven different tasks that might be assigned to an employee of the Good Time Wine Rack Company each hour. To schedule your employees, you need the information on the following two tables. Table 2 is a "Quick Reference" Table, so that you can convert instructions into numerical code in a glance. Table 3 is the key to success at the Good Time Wine Rack Company: it tells youall the important information needed to schedule a successful week, including current inventory position and product structure information.
How to assemble and enter your schedule... The weekly schedule you create specifies what activity each employee does each hour.
Fill out the tables in the "Schedule Entry" worksheet of the schedule template, presumably assigning one activity code (1 through 11) to each of the hours each of the employees will work during the week. If you wish the employee to be deliberately idle, simply leave that hour blank. Each hour of the day is split into a top box and a bottombox - write the activity codes in the top boxes. For example, placing a "3" in the top box of the first column of the first row of Natasha's schedule means Natasha will spend the first hour of Monday morning making double depthhorizontal pieces.
IMPORTANT NOTE: Activities 9, 10, and 11 are "custom work." This means that it matters whichcellar that the employee is working on. Therefore, anytime you assign a 9, 10, or 11 to a particular hour, you should then place a job code in the bottom box below that activity code. For example, writing a 9 in the top box and an 8 beneath it in the first column of the first row of Steve's schedule means Steve will spend the first hour of Monday morning making trim for the Bernard cellar.
Good Time Wine Rack Grading
To earn full credit, you must have nomistakes (or "technical errors") in the schedule and no late shipments as of the end of Friday, Week 1.
The final profit (or cost) will be considered. Here is how you make and/or lose money by scheduling:
INVENTORY COSTS:
- You pay $0.02 per part kept idle in inventory each hour. This applies to any of the four types of parts.
- You pay $0.03 per bottle space kept idle in inventory each hour. This applies to any of the four types of racks. One column of 24-bottle-high, single depth racking has 24 bottle spaces in it. One column of 24-bottle-high, double depth rack has 24*2 = 48 bottle spaces in it. Ten columns of 24-bottle-high, double depth rack has 24*2*10 = 480 bottle spaces in it. Bottle space is the overall measureof how many bottles wine racking will hold.
- The inventory costs will be automatically calculated in the Inventory Costs worksheet of the schedule template.
SHIPMENT PERFORMANCE:
- You earn $0.50 per bottle space for each day a shipment is made early. For example, if a 480 bottle space cellar were shipped 1 day early, you would earn 480*0.50 = $240.00. Once you have successfully packed a cellar,we assume it shipped at theend of the day. Weekends (Saturdayand Sunday) don't count.
- You pay $2.00 per bottle space for each day a shipment is made late.
- Any job that is due during your week as Production Manager (Week 1), but isn't gone by the end of Week 1 will cost you a flat feeof $5,000.
- You are required to calculate your shipment performance using the above scheme.
END OF THE WEEK INVENTORY LEVELS:
- You are only scheduling the shop for one week, but we imagine that somebody will have to pick up where you left off in the next week. (This is a simulation of an on-going operation.) Therefore, there should be an award for leaving this person with some starting inventory:
- You earn $0.10 for every part you leave in inventory at the end of the week in excess of 2,040 parts. 2,040 is the total number of parts you started with. However, if you end with less than 2,040parts in inventory, you will pay $0.20 for every part below the 2,040 benchmark.
- You earn $0.50 for every bottle space you leave in inventory at the end of the week in excessof 1,320 bottle spaces.1,320 is the totalnumber of bottlespaces you started with. However, if you end with less than 1,320 bottle spaces of racking in inventory, you will pay $1.00 for every bottle space below the 1,320 benchmark.
- The end of the weekinventory level costs (or profit) will be automatically calculated in the Inventory Costs worksheet of the schedule template.
IDLE TIME:
- If you idle someone (you simply left the hour blank), you pay $100.00 for every idle hour.
- You are requiredto calculate accidental idle time costs using the above scheme.
How to Calculate Final Profit (or Loss)
- Once you complete the schedule on the "Schedule Entry" worksheet, net loss based on "inventory costs" and gain/loss from the "End of the week inventory levels" will be calculated automatically on the "Inventory Costs"worksheet.
- Calculate earnings/penalties based on your early/late shipments.
- Calculate penalties by havingidle time.
- Consider the above gains/losses and calculate the final profit (or loss)
Expert Answer:
Quantitative Analysis for Management
ISBN: 978-0132149112
11th Edition
Authors: Barry render, Ralph m. stair, Michael e. Hanna
