Assignment 4: Data Tech, Inc.

Case Study

1. Determine whether Jeff should give greater priority to a smaller facility with possibility of expansion or more into a larger facility immediately. According to Sliwinski & Gabryelczyk, As regards real property, facility management is a customer-oriented, complete service, covering the comprehensive decision-making principles for optimum planning, usage and adaptation of buildings, their installations, premises, and services -- reinforced by information systems supporting company management in a strategic manner and with regard to each job/performer participating in the core process. (December 2010, pg. Q1) Jeff should looking facilities management in order to decide which facility would be the most sensible choice. This type of management looks at each component necessary in choosing the proper facility for ones business. In the business engineering architecture for both the organization and the FM area, processes link strategy to information systems, constituting a central element of the architecture. (Sliwinski & Gabryelczyk, December 2010, pg. Q2) Jeff

has only acquired two new clients, which adds to a total of only four clients. His strategy should include forecasting based on the four clients that he already has. He should look at the amount of time it took to obtain the third and fourth client and weight it with the time it took for him to got the first two clients. After he has ascertained that information, he can then work that into the facilities management process. Examining the profitability of a smaller facility to a larger one will help with determining the expansion rate Jeff should take. According to the Case Study of Data Tech, Inc., if Jeff moves into a large facility he has a profitability of $1,000,000 if the demand is high and a profitability

Assignment 4: Data Tech, Inc. Case Study

of $600,000 if demand is low. If he moves into a small facility and a low demand, he has a profitability of $500,000. If Jeff moves into the small facility with the opportunity to expand, hes looking at a profitability of $800,000 with high demand, and he would still have a profitability of $500,000 with a low demand. (Reid & Sanders, 2010, pg. 351) In order to save resources that are not currently needed and to cut down on waste, it may be more economical to decide on the smaller facility with the possibility of expanding. 2. Determine weights for the two (2) capacity factors based on your finding above and discuss how you concluded these were appropriate weights. As there are only thirty points to left to allocate, the potential expansion factor should receive twenty points. This amount of points seems more practical because of the potential merits that expanding a business contains. When a company has the potential to expand and still maintain its profitability, it would be more advantageous to select a location based on potential when profitability can remain high. For excess capacity, the weighted points should be ten because excess capacity for any amount of time is wasteful. Proper forecasting should alleviate any waste within a companys facilities. It is a waste of finite sources that company owners cannot afford to lose. Jeff will maintain profitability if he chooses the potential expansion factor over excess capacity. Anything in excess can lead to a loss in profitability. 3. Once you have selected the factors for the two (2) capacity alternatives, use factor rating to select a new location for Data Tech. After computing the factor rating for each factor it would seem that Location Number Three would be the best choice. It has a weighted score of four-hundred and ten points, which is a

Assignment 4: Data Tech, Inc. Case Study

much higher score that the other locations. Location One has a total weighted score of threehundred points, while Location Two has a weighted score of two-hundred and ninety points. Location Three would give optimum output in profitability, while Location Two would cause capacity issues and cost more money therefore decreasing profitability for Data Tech. According to Weitzner, focusing on precision rather than accuracy is a mistake because groups confound facility planning decisions with issues that essentially have no influence on the final building mass. (May 2006, pg. 95) The close to the business environment factor is the least important factor because it really has nothing to do with the final building mass. Whichever location Jeff chooses, he should do so because of the other factors that are added to the equation. 4. Determine how your factor analysis would be different if you had selected a different capacity alternative. If I had chosen Excess Capacity as the recipient of the twenty points, Location Number Two would have a weighted score of three-hundred and sixty points and would be the optimum location for Jeff to set up shop. The issue with this location is that excess capacity equals excess money spent and therefore less profitability. Although this location has no zeroes for an y of the factors, which would seem the optimal location, it does not have a weighted score high enough to be considered a prime location. It is, however, the optimal location for excess capacity of the three locations. Jeff would have an ideal location set up with extra space, but would lose money. It would be in Jeffs best interest to start small with his expansion because it is not clear whether he will get more clients. Word of mouth is a great way to bring in more clients, but it is

Assignment 4: Data Tech, Inc. Case Study

not a guarantee. Jeff should calculate perceived projections ( or forecasting) into his agenda. Therefore he will have a better sense of any access materials he can afford to keep.

Assignment 4: Data Tech, Inc. Case Study

References Reid, R Dan. & Sanders Nada R. (2010). Operations Management: An Integrated Approach. (4th ed). Hoboken, NJ: John Wiley & Sons, Inc. Sliwinski, Bartlomiej, & Gabryelczyk, Renata. (December 2010). Facility management Process Architecture Framework. Journal of Internet Banking and Commerce. Weitzner, Wendy M. (May 2006). 5 Facility Planning Mistakes (and How to Avoid Them). Healthcare Financial Management.