OPERATIONS MANAGEMENT ASSIGNMENT Harvard Case Solution & Analysis

OPERATIONS MANAGEMENT ASSIGNMENT Case Solution

Question 1

            The solution for the key metrics table is shown in the table below. All calculations could be seen in the excel spreadsheet.

 

Mean Demand per week

Standard deviation

Time Ratio

Desired Service level (assumed)

Lead Time Factor

Shampoo                                   472

140.70

1.414

95%

1.645

Cotton Balls                                     63

16.00

2.000

95%

1.645

Conditioner                                   128

40.61

1.414

95%

1.645

Cotton Swabs                                     62

17.92

2.000

95%

1.645

Body Wash                                   245

75.47

1.414

95%

1.645

Lotion                                   107

29.71

1.414

95%

1.645

Item Description

Safety Stock

Order Up To Target

Business Intuition: Impact on Average Inventory

Shampoo

327.28

                    799.52Demand is expected to go up
Cotton Balls

52.63

                    115.24Demand is expected to go down
Conditioner

94.46

                    222.07Demand is expected to remain same
Cotton Swabs

58.95

                    120.49Demand is expected to go down
Body Wash

175.56

                    420.25Demand is expected to go up
Lotion

69.10

                    176.26Demand is expected to remain same

 Q uestion 2

            The ticket agent utilization rates and the average wait in minutes would be as follows:

Critical

60 per hour split across two queues for two counters

60 per hour combined into one queue for two counters

60 per hour split across three queues for three counters

60 per hour combined into one queue for three counters

Performance

Measure

Ticket Agent Utilization

75%

67%

50%

67%

Average Wait in Minutes

4.5

4.00

3.00

4.00

Business Intuition: Better, Worse, Same?

Better

Better

Better

Question 3

            The best combination of the product concepts which need to be developed are as follows:

Product Concept

Profitability Index

Average Ratings

Development Costs

Revenues

Artificial Sweetener

 $              15.72 $                 5.25 $          318,000 $                     1.90

 

    

Cane Syrup

 $                 6.51 $                 5.75 $          522,000 $                     2.30

Chili-Lime Rub

 $                 0.23 $                 5.75 $          433,000 $                     2.20

Cocao Powder

 $                 8.70 $                 5.75 $          563,000 $                     1.80

Dijon Mustard

 $                 5.15 $                 5.50 $          621,000 $                     2.40

 

    

 

    

Lemon Juice

 $                 2.47 $                 3.75 $          365,000 $                     2.20

Pandanus Leaves

 $              12.56 $                 7.00 $          207,000 $                     2.20

Pickle Juice

 $              (0.49) $                 5.00 $          616,000 $                     1.20

Powdered Cinnamon

 $                 8.56 $                 5.25 $          561,000 $                     1.50

 

    

Soy Sauce

 $                 5.20 $                 5.50 $          731,000 $                     2.10

Sriracha Sauce

 $                 3.21 $                 4.25 $          374,000 $                     1.50

 

    

Tasmannia Pepperberry

 $              13.48 $                 6.50 $          141,000 $                     1.50

 

    

Vanilla Extract

 $                 1.17 $                 5.75 $          515,000 $                     2.20

 

    
 $      5,967,000  $                     25.0

             This portfolio combination is the most optimal of all and it remains under the $ 6 million available funds cap as well as it achieved 2017 revenue target of $ 25 million. The decision and the choices of the product concepts within this portfolio have been made on the tradeoff between two parameters. The first one is the financial aspect which has been measured through profitability index for each product concept and the second one is the average score or rating for the other factors associated with the different product concepts.

            The profitability index, average ratings and the revenues of all the products within the desired portfolio are also depicted in the graph below:

 Question 4

            The cost driver framework has been applied to Maruti Suzuki Company as follows:

Design

            The design of the automotive vehicles of the company has been affected by the standards of the industry. There has been a large number of benchmark procedures and common standards developed within this industry and this has led towards the creation of certain expectations of the customers. Therefore, in this way the design becomes the reflection of the customers and a major cost driver for Suzuki Maruti. The issues dealt here include product line complexity and material specifications..................

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