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EXECUTIVE SHIRTS

COMPANY
Group 1
Introduction
Mr. Dwight Collier, Gen. Manager of Executive Shirt Company (ESC) is planning to introduce customized shirts in his current
production facility since they can fetch 75% more price as compared to regular shirts. Currently, ESC is manufacturing 16,000
shirts per month and they plan to manufacture 2,000 customized shirts per month without hampering the current production.

The company has 5 departments, namely,


Cutting: 1 Machine, 4 Workers
Sewing: 48 Machines, 48 Workers
Inspection: 4 workers
Ironing: 4 Machines, 4 Workers
Packaging: 4 workers
Indirect Workers (material handlers) : 4 Workers

Mr. Collier introduced a change in the manufacturing process by introducing a Laser Cutting Machine for customized shirt.
So he requested two of his managers, Mike and Ike to devise a production plan to maximize the profit from both the
products.
The highlights of their plans are

Mike’s Plan: To go with one production line manufacturing both the products simultaneously (other than the cutting process)
o Eight Batches of regular shirts with 5 shirts each
o One batch of 5 custom shirts
Ike’s Plan: To go for a separate production line for regular and customized shirt
o Eight Batches of regular shirts with 6o shirts each
o One batch of 5 custom shirts
Current Production Process
Analysis for current production process
Time required for producing one unit from laying and
cutting operation=120/60*8=0.25 min
Mike’s production process
Mike’s Production Plan
Time required for producing one unit from laying
and cutting operation=120/60*8=0.25 min
whereas the cycle time of laser cutting machine is
2.5/5=0.5
ike’s production
process

Regular t-shirt Custom t-shirt


Ike’s Production Plan
Regular Shirt Production
Ike’s Production Plan calculation

Quantity Obtained value (regular shirts)

Actual cycle time Bottle neck time Bottle neck time = 0.67 per shirt
0.67 min per shirt

Production Bottle neck time Bottle neck = 0.67 480/0.67=720


capacity min per shirt units

WIP inventory Total inventory Cutting +other 151*60=9060


operations

Manufacturing Input to output WIP/production 9060/720=12.58


lead time capacity

Capacity Actual production 800/720 111.11%


utilisation :production
capacity

Direct labour Direct labour per Cutting +other 25.51+4*.25=26.5


utilisation time operations 1
(min/shirt)

Direct labour Total labour cost Including overtime 3.43


cost($/shirt) per unit time

Direct labour Labour utilised 800*26.51/49*8*60 81.1%


utilisation *1.11
Comparison of Mike’s and Ike’s
Production Plan

Now let us see about the various


constants taken in the various plans

81.1%
Cost Comparison of Mike’s and Ike’s Plan

$3.43

$15.59

$34.41
Conclusion
From the cost comparison table of Mike’s and Ike’s Plan, we can see that the total
profit per shirt from Mike’s plan is greater $4.19.

Thus, Mike’s plan is better.