Lilly Hillcrest started a custom drapery business in Naples, Florida in 2014. Her market segment is for owners of homes over one million dollars. Her prices are high, but the customer receives exceptional personal service and a service guarantee on all work. Customer service and the quality of their work are the top competitive priorities of Custom Drapes (CD). Custom draperies require Lilly and her employees to visit the customer’s home and evaluate the home’s layout, light, and color palette to decide what type of draperies might work best. Two of Lilly’s staff are interior designers specializing in drapery window treatments. Next the customer and employee select the fabric. Fabric books contain millions of fabric colors, weaves, and designs. The customer and designer must also decide on many other drape design characteristics, such as pleated folds, flat panels, classic tab and rod drapes, goblet pleats, linings, and valance designs. The number of custom combinations now is in the billions, with many opportunities for errors. For high-end customers, the drapes for one wall can be over $100,000. The next step is for an employee to take measurements of the venue where the drapes are to be installed. These specifications can range from a half-dozen to several dozen measurements. Once the customer order is approved, a work order is released to CD’s in-house factory. Purchase orders are sent to the supplier(s) for the fabric and thread. Each work order is hand cut, sewed, and pressed using industrial sewing and stream pressing machines. CD groups sewing machines in one area of the factory alongside stain- less steel work tables. Each order requires a new setup to install thread, set and calibrate the machine, and position the fabric. The sewing machines can accommodate a wide variety of thread weights and types of fabric, such as silk or cotton. The employees are cross-trained and skilled at sewing and pleating different fabrics. These skilled backroom employees inspect their own work, and three employees must sign off on a complete order. Eighteen percent of the factory work requires rework during production. Their average customer order requires 36 square yards of fabric for two pleated panels on each side of a window or sliding glass door with a ceiling height of eleven feet. Each window treatment may be a separate order (i.e., a lot size of one) given the order specifications. If the fabric is the same, customer orders for an entire home are batched. Larger drapery manufacturers use automated cutting and sewing systems to produce standard drapes sold in most retail stores. They use tens of millions of square yards of fabric per year to produce their panels. Most large drapery and curtain manufacturers are located in Asia. The automated systems include computer-aided design software, large fabric and conveyor tables, huge spools of different types and colors of thread and fabric, and automated sewing equipment. Even small systems need thousands of square feet of production space. The bigger manufacturers sell their drapes through furniture stores worldwide without direct customer contact. Their order completion times are double CD’s lead times. In the last few years, more regional furniture stores have asked CD to manufacture draperies for them. These standardized draperies would be in certain sizes and lengths and sold in the stores. The furniture stores would select the style and fabric, and CD would manufacture them. Lilly summarized these proposed standard orders on her computer’s spreadsheet as producing 32 different drapery panels in order quantities ranging from 1,000 to 10,000 drapery panels. This mix of standard orders totaled 112,568 panels. Lilly was considering purchasing a small, used computerized curtain panel system for $490,000 and building a new building to house the equipment. The building would cost $2.5 million dollars including kitchen, security, and other factory equipment. The new factory would be built behind the current custom factory on land Lilly owned. The variable cost to manufacture a typical standard drape panel using this system would be $78.90, and the panel would be sold for $100. 1. Rank in order the competitive priorities for CD’s custom jobs. Rank in order the competitive priorities for the standard drapery business. 2. What is the break-even quantity (in panels) if Lilly builds the facility and buys the equipment to pro- duce standard panels? 3. Should Custom Draperies accept the proposals to manufacture 32 different drapery panels in order sizes up to 10,000 panels? What are the implications? If the answer is yes, what other operations and logistics decisions are necessary to support this growth initiative? If your answer is no, justify and explain. 4. What are the strategic growth options for Custom Draperies? 5. What are your final recommendations?
> A specification for a spacer plate used in a machine tool has specifications LSL 5 0.05 and USL 5 0.10 cm in thickness. A sample of 100 parts found m 5 0.067 and s 5 0.021. Compute and interpret the process capability indexes Cp, Cpl, Cpu, and Cpk.
> Suppose that a specification calls for LTL 5 2.0 and UTL 5 6.0. A sample of 100 parts found m 5 4.5 and s 5 0.5. Compute Cp, Cpl, Cpu, and Cpk. Should the manager consider any action based on these results?
> The worksheet C17 P37 Data in MindTap provides five examples of control charts. Interpret the patterns in each and determine if the processes are in control. If not, state the type of out-of-control condition that you identify (for example, points outsid
> Consider the following data showing the number of errors per thousand lines of code for a software development project. Find the control limits for a c-chart for monitoring errors per thousand lines of code.
> Del, every wire transfer request is processed first- come-first-served. Some of these wires are for millions of dollars, while others are under $100,” said Betty Kelly, a 28-year-old manager of Cash Movement (CM). She continued, â
> Find control limits for a c-chart with /
> A fast food franchise tracked the number of errors that occurred in customers’ orders. These included wrong menu item, wrong size drink, lack of condiments, wrong price total, and so on. Some orders may have more than one error. In one week, 1,500 orders
> At a pizza restaurant, a 20-week study of 30 pizzas per week found a total of 18 pizzas made improperly. Compute control limits for a p-chart.
> Twenty-five samples of 100 items each were inspected and 68 were found to be defective. Compute control limits for a p-chart.
> Twenty-five samples, each consisting of 200 loan applications at a bank, resulted in a total of 40 applications that had some type of error. Compute the control limits for a p-chart.
> Thirty samples of size 4 of the customer waiting time at a call center for a health insurance company resulted in an overall mean of 14.7 minutes and average range of 0.9 minutes. Compute the control limits for x- and R-charts.
> Twenty-five samples of size 5 resulted in an overall mean of 5.42 and an average range of 20. Compute control limits for x- and R-charts.
> Thirty samples of size 3 resulted in an overall mean of 16.51 and average range of 1.30. Compute control limits for x- and R-charts.
> Bill & Becky Travel, Inc. is a full service travel agency. Data in the worksheet C17 P27 Data in MindTap shows results for the question “Would you recommend us to a friend?” from 200 customers who were sampled during one week. Count the number of respons
> Develop cause-and-effect diagrams for any one of the following problems: a. Poor exam grade b. No job offers c. Too many speeding tickets d. Late for work or school
> He filed a lawsuit against us, Luke,” stated Mike Verssa, the Vice President of Operations for the State Human Resources Commission (SHRC). “Luke, you are his manager. What happened? He claims you raised his daily prod
> The following list gives the number of defects found in 30 samples of 100 electronic assemblies taken on a daily basis over one month. Plot these data on a run chart, computing the average value (center line). How do you interpret the chart?
> Reship Solutions, Inc. has a distribution center in Cincinnati, where it receives and breaks down bulk orders from suppliers’ factories and ships out products to retail customers. The different quality cost elements are shown in the tab
> Classify the cost elements shown below for the Impressive Printing Company into the proper quality cost categories and find the total quality cost by category and percentage of total quality cost by category.
> Given the cost elements in the table below, deter- mine the total percentage in each of the four major quality-cost categories.
> Analyze the cost data below. What implications do these data suggest to managers?
> Boardwalk Electronics manufactures 300,000 circuit boards per month. A random sample of 3,000 boards is inspected every week for five characteristics. During a recent week, three defects were found for one characteristic, and two defects each were found
> Nighthawk Airlines measured their numbers of lost bags in one month and found that they had lost 35 bags for 10,000 customers. If the average number of bags per customer is 1.2, how many errors per million opportunities (epmo) does this represent? The wo
> Wellplace Insurance Company processes insurance policy applications in batches of 50. One day, they had ten batches to process and, after inspection, it was found that four batches had nonconforming policies. One batch had three nonconformances, another
> Leatherlike Manufacturing Company makes an artificial leather-like product for the fashion accessory market. The material is made in sheets and has the appearance of a thin rug. Each sheet is 36 inches wide, 100 feet long, and is wound into a roll. The q
> The Naples Newspaper completes production of its daily edition by 5 a.m. A truck picks up pallets loaded with newspapers and delivers them to five neighbor sites, where carriers sort and fold the papers for individual routes. The mileage is shown in the
> 1. Research the parts of the diamond value chain and then answer the following question: How would you describe the type of process used for (a) exploration, (b) diamond mining, (c) sorting and grading, (d) cutting and polishing centers, (e) trading cent
> Dan’s Auto Detailing business performs two major activities: exterior cleanup, and interior detailing. Based on the size of car and condition, time estimates for six cars on Monday morning are as shown in the accompanying table. a. Sequ
> On Monday morning, Baxter Industries has the following jobs waiting for processing in two departments, milling, and drilling, in that order. a. Develop a minimum makespan schedule using Johnson’s rule. b. Construct a Gantt chart for the
> A manufacturing process involving machined components consists of two operations done on two different machines. The status of the queue at the beginning of a particular week is as follows: The processing on machine 2 must follow processing on machine 1.
> At Lynwood Manufacturing, (see Solved Problem 15.9), suppose the dispatcher uses the LWR instead of FNO. Which job (job 2 or job 3) will be scheduled next on the drill press at time 30?
> Five customers brought in computers to be repaired to a small shop. Estimated repair times (in days) and dates promised are given below. Due dates were set based on available technicians; however, one technician had a medical emergency and will be unavai
> A workstation has one maintenance mechanic to re- pair failed machines. We can think of the mechanic as the processor (scarce resource) and the machines awaiting repair as the jobs. Let us assume that six machines are down, with estimated repair times gi
> Five patients arrived at the radiology department in a hospital and are waiting for X-rays. Use the SPT rule to create a schedule. Compute the start time and flow time for each patient.
> On Tuesday morning at 8 a.m., an IT analyst found four project “tickets” in her inbox that arrived over- night. The estimated times to complete the projects and the due dates requested are given below. If the projects
> These six jobs are to be scheduled on a single machine: a. Suppose the jobs are processed in FCFS numerical order. Compute the makespan, flow time for each job, and overall average flow time. b. In what order would the jobs be processed using the SPT rul
> Five jobs are to be processed on one machine. If the jobs are processed in the FCFS order 1-2-3-4-5, compute the start time and flow time for each job:
> The Hickory Medical Clinic recently conducted a patient satisfaction survey. Using a scale of 1–5, with 1 being “very dissatisfied” and 5 being “very satisfied,” th
> Zappos (www.zappos.com) is a Las Vegas–based online retailer that has been cited in Fortune’s list of the Best Companies to Work For and Fast Company’s list of the world’s most innov
> A supermarket has the following minimum personnel requirements during the week. Each employee is required to have two consecutive days off. How many regular employees are required, and what is a good schedule?
> A hospital emergency room needs the following numbers of nurses: Each nurse should have two consecutive days off. How many full-time nurses are required, and what is a good nurse schedule?
> Garden Manufacturing is a small, family-owned garden tool manufacturer located in Florence, South Carolina. The bills of materials for models A and B of a popular garden tool are shown in Exhibit 14.35 and other additional component information is provid
> The MPS for product A calls for 100 units to be completed in week 4 and 200 units in week 7 (the lead time is one week). Spare part demand for Item B is 10 units per week. The bill of materials for product A is shown in Exhibit 14.34, and the inventory r
> Consider the master production schedule, BOM shown in Exhibit 14.33, and inventory data shown below. Complete the MPS and MRP explosion and identify what actions, if any, you would take given this requirements plan. a. Develop a material requirement plan
> An orthopedic surgeon specializes in three types of surgery—hip, knee, and ankle replacements. The surgery mix is 40% hip replacements, 50% knee replacement, and 10% ankle replacement. Partial bills of materials for each type of surgery
> The BOM for product A is shown in Exhibit 14.32 and data from the inventory records are shown in the table. In the master production schedule for product A, the MPS quantity row (showing completion dates) calls for 250 units in week 8. The lead time for
> Irene’s Kitchen & Catering Service sells three kinds of cakes—single, double, and triple layers. The product mix is 30% single layer, 50% double layer, and 20% triple layer. The bills of material are as follows: a.
> Each bank teller workstation is forecast to process 400 transactions (the end item) on Friday. The bank is open from 9:00 a.m. to 7:00 p.m. on Friday with 90 minutes for lunch and breaks. Three teller windows are open on Friday. A work-study analysis rev
> Given the information below, complete the MRP record and explain what it tells the inventory analyst to do. Lot Size Rule: Fixed Q 5 100 units Safety Stock 5 0 units Lead Time 5 three weeks Current On-Hand Quantity 5 80 units
> Given the bill of material in Exhibit 14.31, if the gross requirements to build 250 units and an on-hand inventory for A of 40 units, what are the net requirements for all items? All component parts have zero on-hand inventory except item D with 200 unit
> Consider the same bill of material in Exhibit 14.30 and information in Problem 31 including the on-hand component quantities. Assume that two of component B are needed for each A and that the gross requirement for A is 220 units. Compute the net requirem
> Given the bill of material for the printer cartridge in problem 31 and Exhibit 14.30, and the following on-hand quantities, compute the net requirements for each item. The gross requirement for A is still 200 units.
> Given the bill of material for the printer cartridge (A) in Exhibit 14.30; a gross requirement to build 200 units of A; an on-hand inventory level for end- item A of 80 units; and assuming zero lead-times for all items A, B, C, D, and E, compute the net
> The Silver Star Bicycle Company will be manufacturing men’s and women’s models of its Easy-Pedal 10-speed bicycle during the next two months, and the company would like a production schedule indicating how many bicycles of each model should be produced i
> A lawn chair company, Leisure Furniture, manufactures two types of deck and lanai reclining chairs. Contribution to profits and overhead for Model A chairs are $35 and for Model B chairs $26. One independent process cuts and sews the weather proof fabric
> Metal Fabricators, Inc. manufactures gas grill tanks, Model # 1420, for four original equipment manufacturers (OEMs). Demand is forecast to be as follows: Quarter 1 – 2,800 tanks, Quarter 2—3,400, Quarter 3—3,600, and Quarter 4—2,900. Due to a hedging pr
> Jet skis and snowmobiles are assembled by Mobile Incorporated. Because both end-items use the same small engine, you can aggregate demand for the engine assembly. Develop an aggregate plan that uses a level production strategy each quarter and the inform
> Rapallo Corporation manufactures industrial vacuum cleaners with forecasted sales for the next five weeks as follows: Week 1 5 2,000 units, Week 2 5 2,500, Week 3 5 3,000, Week 4 5 3,000, and Week 5 5 3,500. Beginning inventory equals 13,000 units and th
> The forecast demand for fudge for the next four months is 120, 160, 20, and 70 pounds. a. What is the recommended production rate if a level strategy is adopted with no backorders or stock outs? What is the ending inventory for Month 4 under this plan? b
> 1. Explain whether the global diamond supply chain a push system or a pull system, and whether the global diamond supply chain is an efficient or responsive system for make-to-order and make-to-stock jewelry. Provide some examples to justify your reasoni
> Using the data in Problem 38, assume the operating manager reduces total average inventory on-hand by 21 percent by using better operations and supply chain methods. What is the revised cash-to-cash conversion cycle in weeks? What does this change in the
> As an operations management consultant, you have been asked to evaluate a furniture manufacturer’s cash-to-cash conversion cycle under the following assumptions: sales of $23.5 million, cost of goods sold of $20.8 million, 50 operating weeks a year, tota
> Consider the following performance data for Modular Computers, Inc (MCI). Sales 5 $34 million, cost of goods sold 5 $30 million, total average inventory 5 $428,000, accounts receivable 5 $2,100,000, accounts payable 5 $2,900,000, and operating 365 days p
> Given the information in Exhibit 13.11, what are the procurement, oversight, transportation, order cycle inventory, pipeline inventory costs, and total supply chain costs for using the supplier Ebert, Inc. Ebert manufactures small speakers for automobile
> Given the information in Exhibit 13.10, compute the procurement, oversight, transportation, order cycle inventory, pipeline inventory costs, and total supply chain costs for an air conditioner coil purchased from the supplier Entity, Inc. The order size
> What is the annual transportation cost if annual demand is 240,000 units and the cost to transship a unit is $0.80 per unit?
> What are order cycle costs if annual demand is 8,000 units, the order quantity is 1,000 units, and annual order cost is $97? What if the order size changes to 500 units or 8,000 units?
> What is the pipeline inventory value if average daily demand is 82 units, the lead time is 20 days, and annual inventory carrying costs is $12?
> What are total purchase and oversight costs if annual demand is 1,000,000 units, the purchase price is $2.42, and the management oversight costs to monitor and expedite the trans-Pacific shipment are $0.16 per unit?
> Claiken Incorporated is a supplier of axles for light trucks. They held an average axle inventory of $1.6 million last year, with a cost of goods sold of $21.0 million. What is the inventory turnover for axles? A customer wants them to increase its inven
> Whew, I’m glad the town hall meeting is over. The audience was hostile!” Tom Bourbon commented as he was escorted by a police officer to his car in the high school parking lot. The officer replied. “T
> Based on the following information, how many days of supply of inventory is the firm holding (assume 250 days of operation per year)? Interpret your answer if the industry average inventory days’ supply is 30 days.
> Andrew Manufacturing held an average inventory of $1.1 million (raw materials, work-in-process, finished goods) last year. Its sales were $8.0 million, and its cost of goods sold was $5.8 million. The firm operates 260 days a year. What is the inventory
> Bragg Johnson, materials manager at Johnson & Sons, has determined that a certain product experienced 3.8 turns last year, with an annual sales volume (at cost) of $975,000. What was the average inventory value for this product last year? What would be t
> A manufacturer of large industrial electric motors has a cost of goods sold of $111,690,000 and an average inventory value of $14,609,300. What is its inventory turnover? What does it mean?
> A big box electronics store sells 250 65-inch televisions during the year. The store maintains an average inventory of five units. What is its inventory turnover? What implications does this have for inventory management?
> Over the past year, Keto Grocery Store had a cost of goods sold of $24,500,000 and an average value of inventory of $1,100,500. What is its inventory turn- over? What does it mean?
> Keto Grocery Store sells 400 gallons of milk each month. The average on-hand inventory is 50 gallons. What is the inventory turnover? What does it mean?
> Tune Football Helmets Company is considering changing the current inventory-control system for football helmets. The information regarding the helmets is given below: a. The firm decides to use a fixed-period system to control the inventory and to review
> Wildcat Tools is a distributor of hardware and electronics equipment. Their socket wrench inventory needs better management. The information regarding the wrenches is given below. a. The company decides to use a continuous re- view system. What is the re
> Crew Soccer Shoes Company is considering a change of their current inventory-control system for soccer shoes. The information regarding the shoes is given below: a. The company decides to use a fixed-order quantity system. What would be the reorder point
> I’m going to Bookmaster to buy a book,” Luke Chris yelled as he walked out of his apartment. “I’ll be back in about ninety minutes,” he continued as his roommate la
> For the data given in Exhibit 12.26 for problem 50, illustrate the operation of a fixed-period-inventory system with a replenishment (M) level of 40, a re- view period of five days, a lead time of 3 days, and use Equation 12.1. Assume that orders are pla
> Allen’s Shoe Stores carries a basic black dress shoe for men that sells at an approximate constant rate of 500 pairs of shoes every three months. Allen’s current buying policy is to order 500 pairs each time an order i
> Apply the EOQ model to the quantity-discount situation shown in the data below: Assume that D 5 500 units per year, Co 5 $40, and the annual inventory-holding cost is 20 percent. What order quantity do you recommend?
> The B&S Novelty and Craft Shop in Bennington, Vermont, sells a variety of quality, handmade items to tourists. It will sell 300 hand-carved miniature replicas of a colonial soldier each year, but the demand pattern during the year is uncertain. The repli
> A product with an annual demand of 1,000 SKUs has Co 5 $30 and Ch 5 $8. The demand exhibits some variability such that the lead-time demand follows a normal distribution, with a mean of 25 and a standard deviation of five. a. What is the recommended orde
> Nation-Wide Bus Lines is proud of the six-week driver-training program it conducts for all new Nation-Wide drivers. The program costs Nation-Wide $22,000 for instructors, equipment, and so on, and is independent of the number of new drivers in the class
> The maternity ward of a hospital sends one baby blanket home with each newborn baby. The following information is available for the baby blankets: a. As the new maternity ward manager, you decide to improve the current ordering methods used for items whi
> The XYZ Company purchases a component used in the manufacture of automobile generators directly from the supplier. XYZ’s generator production, which is operated at a constant rate, will require 1,200 components per month throughout the year. Assume order
> The reorder point is defined as the demand during the lead time for the item. In cases of long lead times, the lead-time demand and thus the reorder point may exceed the economic order quantity, Qp. In such cases the inventory position will not equal the
> Exhibit 12.26 gives the daily demand of a certain oil filter at an auto supply store. Illustrate the operation of a fixed-order-quantity inventory system by graphing the inventory level versus time if Q 5 40, R 5 15, and the lead time is three days. The
> The Hudson Jewelers case study found in MindTap inte- grates material found in each chapter of this book. Case Questions for Discussion: 1. Hudson Jewelers’ current layout displays jewelry designs from the CAD system on a screen in the front of the store
> Given the weekly demand data in Exhibit 12.25 illustrate the operation of a fixed-order-quantity inventory system with a reorder point of 75, an order quantity of 100, and a beginning inventory of 125. Lead time is one week. All orders are placed at the
> Bishop Manufacturing is implementing an economic order quality (EOQ) inventory-control system and needs a good estimate of the cost to process a purchase order (PO). It takes five total labor hours to process a PO. The average number of stock keeping uni
> JAZ Medical Supplies is implementing a new economic order quality (EOQ) inventory-control system and needs a good estimate of the cost to process a purchase order (PO); i.e, the order cost Co. It takes four total labor hours to process a PO. The average
> After one year you are promoted to assistant man- ager and realize current inventory management practices are not systematic with too much stock of some SKUs and too little of others. Your retail store operates 52 weeks per year and one SKU you stock is
> TV Galore is a new specialty store that sells television sets, video games, and other television-related products. A new Japanese-manufactured game sells cost $400. Because such games have a short life cycle and can be considered somewhat perishable, inv
> Brenda, in problem 43, wants to consider set- ting up a fixed-period inventory system for the 28-ounce bottle of Super Algaecide (SA) SKU. At the beginning of the current week, D. J. Kole, the materials manager, checked the inventory level and found 55 u
> Brenda opened a pool and spa store in a lively shop- ping mall and finds business to be booming but she often stocks out of key items customers want. She decides to experiment with inventory control methods, such as using a continuous review (fixed-order
