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Running head: Case study Lesson 7

Lesson 7 Case Studies


Submitted by:
Narendra Raj Bohora
Operation Management: Level Operation

Case study

2
Level operation

Small company located in Pennsylvania, manufacturers a variety of security devices and


safes. Several different models of safes (S7-S8-S9-S1-S2) are available for purchase and due to
increased demand the production facility has been enlarged to accommodate the additional
production needs. Production manager Stephanie Cole must determine the best production
quantity per cycle for each day of the week. She understands that partially completed safes are
not permitted (each cycle must turn out finished cycles). Stephanie consulted the engineering
department; they have determined the best production sequence is S7-S8-S9-S1-S2.
Stephanie must comprehend the large picture of production demand in order to ensure the
product availability to meet the needed demand. The ultimate 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 cycle time is 5, as the least demand for daily production is 5.

Case study
S.

Model

Weekly

Daily

Daily real

Units/Cycl

N
1

S1

Demand
120

Production
120/5=24

production
24

e
24/5=4.8

S2

102

102/5=20.4

21

21/5=4.2

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 1.
Model
Total
S1

S2

S7

S8

S9

If the inventory cost is high, firm can produce

14

If the inventory cost is low, firm can produce

17

Figure-2
As the given sequence by engineer, firm can produce their respective number of model in 5
cycle time as shown in figure-3.

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

Case study

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

=14

=17

=17

=16

=14

3extra

3 extra

2extra

Figure-3
From above analysis Stephanie can choose low inventory policy or high inventory policy on the
basis of holding cost and lost sells. Stephanie can suggest production manager for fulfilling
above demand to produce the above item in five cycle of sequential order as shown in figure-3.

Bibliography
(n.d.). Retrieved 08 19, 2014, from www.studymode.com: www.studymode.com/essays/LevelOperations-46677243.html
Stevenson, W. (2009). Operation Management (10th ed.). McGraw-Hill Irwin .

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