Take-Home Portion, Final Exam
Case 1The Hotel Monaco
Tatyana Kasykina, manager of the Hotel Monaco,
is considering how to restructure the front desk to reach an optimum level of
staff efficiency and guest service.At
present, the hotel has five clerks on duty, each with a separate waiting line,
during peak check-in time of 3:00 pm to 5:00 pm.Observation of arrivals during this period
shows an average of 90 guests arrive each hour
( although there is no upward limit on the
number that could arrive at any given time ) .
It takes an average of 3 minutes for the front-desk clerk to register
Ms. Kasykina is considering three plans for
improving guest service by reducing the length of time guests spend waiting in
line.The first proposal would designate
one employee as a quick-service clerk for guests registering under corporate
accounts, a market segment that fills about 30% of all occupied rooms.Because corporate guests are pre-registered ,
their registration takes just 2 minutes.
With these guests separated from the rest of the clientele, the average
time for registering a typical guest would climb to 3.4 minutes.Under this plan, non-corporate guests would
choose any of the remaining four lines.
The second plan is to implement a single line
system.All guests would form a single
waiting line to be served by whichever of five clerks became available.This option would require sufficient lobby
space for what could be a substantial queue.
The use of an automatic teller machine ( ATM)
for check-in’s is the basis of the third proposal.This ATM would provide about the same service
rate as would a clerk.Because initial
use of this technology might be minimal, Kasykina estimates 20% of customers,
primarily frequent guests, would be willing to use the machines. ( This might
be a conservative estimate if guests perceive direct
benefits from using the ATM , as bank customers
do.Citibank reports some 95% of its
Manhattan customers use its ATM’s.)Ms.
Kasykina would set up a single queue for customers who prefer human check-in
clerks.This line would be served by the
five clerks, although Kasykina is hopeful the ATM machine will allow a
reduction to four.
Determine the average time a guest spends checking in.How would this change under each of the
which option do you recommend?
Specifically state the type of queue configuration. Do NOT say, for
example, ‘option 8.’
Case 2Jackson Manufacturing Company-
Dominika Wojdat, vice president of operations at Jackson Manufacturing
Company, has just received a request for quote ( RFQ ) fromDeKalb Electric Supply for 400 units per week
of a motor armature.The components are
standard and either easy to work into the existing production schedule or
readily available from established suppliers on a JIT ( just-in-time )
basis.But, there is some difference in
assembly.Ms. Wojdat has identified
eight tasks that Jackson must perform to assemble the armature.Seven of these tasks are very similar to the
ones performed by Jackson in the past ; therefore, the average time and
resulting labor standard of those tasks is known.The eighth task, an overload test , requires
performing a task that is very different from any performed previously,
however, Dominika has asked you to conduct a time study on the task to
determine the standard time.Then an
estimate may be made of the cost to assemble the armature.This information, combined with other cost
data, will allow the firm to put together the information needed for the RFQ .
To determine a standard time for the task, an
employee from an existing assembly station was trained in the new assembly
process. Once proficient, the employee was then asked to performthe task 17 times so a standard could be
determined.The actual times observed
were as follows ( in minutes ) :
The worker had a 115% performance rating. The
task may beperformed in a sitting
position at a well-designed ergonomic workstation in an air-conditioned
facility. Although the armature itself weights 10.5 pounds, there is a carrier
that holds it so the operator need only rotate the armature.But, the detail work remains high :”
therefore, the fatigue allowance will be 8%.
The company has an established personal allowance of 6%. Delay should be
very low. Previous studies of delay in this department average 2%.This standard is to use the same figure.
The workday is 7.5 hours, but operators are paid
for 8 hours at an average of $12.50 per hour.
In your report to Ms. Wojdat , you realize you
will want to address several factors :
large should the sample be for a statistically accurate standard ( at ,
the 99.73 % confidence level and accuracy of 5%
is the sample size adequate ?
how many units should be produced at this
workstation per day ?
e)what is the cost per unit for this task in direct labor cost ?
Sanghavi Bicycle Company ( SBC) , located in
NYC , is a wholesale distributor of bicycles and bicycle parts.Formed in 2009, by Baruch College alumnus,
Siddgarth Sanghavi ,the firm’s primary
retail outlets are located within a 400 mile radius of the distribution
center.These retail outlets receive the
order from SBC within 2 days after notifying the distribution center, provided
the stock is available.However, if an
order isn’t fulfilled by the firm, no backorder is placed ; the retailers
arrange to get their shipment from other distributors, and SBC loses that
amount of business.
The firm distributes a wide variety of
bicycles. The most popular model, and the major source of revenue to the firm,
is the AirWing.SBC receives all the
models from a single manufacturer in India, and shipment takes as long as 4
weeks from the time an order is placed.
With the cost of communication, paperwork, and customs clearance
included, SBC estimates each time an order is placed, it incurs a cost of
$65.The purchase price paid by SBC, per
bicycle, is roughly 60% of the suggested retail price for all the styles
available, and the inventory carrying cost is 1% per month ( 12% per year) of
the purchase price paid by SBC. The retail price (paid by the customers ) for the AirWing is
$170 per bicycle.
SBC desires to develop an inventory plan for
2011.The firm wants to maintain a 95%
service level with its customers to minimize the losses on the lost
orders.The data collected for the past
two years are noted in the below table.
A forecast for AirWing model sales in 2011 has been developed and will
be used to make an inventory plan for SBC.
Demand For AirWing Model
Month20092010Fcst for 2011
develop an inventory plan to help SBC. In particular, what would you
suggest to be the EOQ?
discuss ROP and total costs
can you address demand that is not at the level of the planning horizon?How can you incorporate yield management to
better manage and influence the demand pattern.
You should draw the demand curve and demonstrate ( graphically and
descriptively) your thoughts as regards better managing the demand faced by
Case 4Roger Adams Irrigation, Inc.
Which vendor should be selected and what order
quantity is best if Adams Irrigation wants to minimize total cost?