Lesson 7 Case Studies

Case Study of Week 7th

Level Operation
Bishnu Dhamala
MGT 620 Operations Management & Supply Chain
August 22, 2014

Lesson 7 Case Studies

Introduction
Level operation is a small company located in eastern Pennsylvania; it produces a variety
of security devices and safes. The safes come in several different designs. Recently, a number of
new customers have placed orders, and the production facility has been enlarged to
accommodate increased demand for safes. Production manager Stephanie Coles is currently
working on a production plan for the safes. She needs a plan for each day of the week. She has
obtained the following information from the marketing department on projected demand for the
next five weeks:
Model

S1

S2

S7

S8

S9

Weekly Qty

120

102

48

90

25

The department operates five days a week. One complexity is that partially
completed safes are not permitted; each cycle must turn out finished units:
Core Issues:
What might Stephanie determine as the best production quantity per cycle for
each day of the week?

Lesson 7 Case Studies

Analysis and Evaluation

From the case as we know that, Small Company located in Pennsylvania, manufacturers a
variety of security devices as well as safes. Numerous different models of safes (S7-S8-S9-S1S2) are available for purchase and due to increased demand the production facility has been
enlarged to accommodate the additional production needs. Production manager named Stephanie
Cole must conclude the best production quantity per cycle for each day of the week as per the
given case. She already understand that to some extent completed safes are not permitted (each
cycle must turn out finished cycles). Then after she consulted engineering department; where
they have determined the best production sequence is S7-S8-S9-S1-S2 as per the case which is
given.
She needs to comprehend the large picture of production demand in order to ensure the
product availability to meet the needed demand. The eventual goal should be a balanced
operation system as well as she has to think about market demand, inventory policy, and Nature
of the product in production plan. One that makes the process time as short as possible, eradicate
disruptions and eliminate waste (excess inventory). Stephanie was given weekly quantity
demands; she must first break those numbers down to daily production demands, determine the
number of cycles to run daily, and how many of each safe model to produce in any given cycles
as shown in Figure 1. The given cycle time is 5, as the least demand for daily production is 5.
S.N Model

Weekly

Daily

Daily real

Demand

Production

production

Units/Cycle

S1

120

120/5=24

24

24/5=4.8

S2

102

102/5=20.4

21

21/5=4.2

Lesson 7 Case Studies

S7

48

48/5=9.6

10

10/5=2

S8

90

90/5=18

18

18/5=5

S9

25

25/5=5

5/5=1

FIGURE (I ).

MODEL
TOTAL

When the inventory cost is high, firm can

S1

S2

S7

S8

S9

14

17

produce or manufacture
When the inventory cost is low, firm can
produce or manufacture
FIGURE -II
As per the case which is given a sequence by engineer, firm can produce or manufacture
their respective number of mode in 5 cycle time are as follow:
1ST CYCLE

2ND CYCLE

3RD CYCLE

4TH CYCLE

5TH CYCLE

PRODUCTION

S7 (2)

S7 (2)

S7 (2)

S7 (2)

S7 (2)

10

S8 (3)

S8 (4)

S8 (4)

S8 (4)

S8 (3)

18

S9 (1)

S9 (1)

S9 (1)

S9 (1)

S9 (1)

S1 (4)

S1 (5)

S1 (5)

S1 (5)

S1 (5)

24

S2 (4)

S2 (5)

S2 (5)

S2 (4)

S2 (3)

21

Lesson 7 Case Studies

=14

=17

=17

=16

3EXTRA

3 EXTRA

2EXTRA

FIGURE-(III)

=14

Lesson 7 Case Studies

Recommendation:
From the above analysis and evaluation, we came into the conclusion that Stephanie
can choose low inventory policy or high inventory policy as per the holding costs as well as
lost sells, Stephanie can propose as well as can suggest to production department for
fulfilling above demand to manufacture the above item in the given cycle of sequential
order as per the figure (iii).

Lesson 7 Case Studies

References:
William J Stevenson (2010). Operational Management

http://smallbusiness.chron.com/strategies-used-production-planning-scheduling-1808.html
http://www.productionplanning.com/Production-Planning.aspx