# Operation Management

CASE STUDY: 1

Ram Dubey recently purchased a chain of dry cleaners in North Uttar Pradesh. Although the business is making a modest profit now, Ram suspects that if he invests in a new press, he could recognize a substantial increase in profits. The new press costs \$ 15,400 to purchase and install and can press 40 shirts an hour or 320 per day. Ram estimates that with the new press, it will cost \$ 0.25 to launder and press each shirt, customers are charged \$ 1.10 per shirt.

Q1) How many shirts will Ram have to press to break even?

Q2) So far Ram’s workload has varied from 50 to 200 shirts a day. How long would it take to break even on the new press at the low demand estimate? At the high demand estimate?

Q3) If Ram cuts his price to \$ 0.99 a shirt, he expects to be able to stabilize his customer base at 250 shirts per day. How long would it take to break even at the reduced price of \$ 0.99?

Q4) Should Ram cut his price and buy the new press?

CASE STUDY : 2

The Peachtree Airport in Atlanta serves light aircraft. It has a single runway and one air traffic controller to land planes. It takes an airplane and minutes to land and clear the runway (exponentially distributed) planes arrive at the airport at the rate of 5 per hour (Poisson distributed).

Q1) Determine the average number of planes that will stack up waiting to land?

Q2) Find the average time a plane must wait in line before it can lead?

Q3) Calculate the average time it takes a plane to clear the runway once it has notified the airport that it is in the vicinity and wants to land?

Q4) The FAA has a rule that an air traffic controller can, on the average, land planes a maximum of 45 minutes out of every hour. There must be 15 minutes of idle time available to relieve the tension. Will this airport have to hire an extra air traffic controller?

CASE STUDY : 3

During the past few years the legislature has severely reduced funding for State University. In reaction, the administration at State has significantly raised tution each year for the past 5 years.

A bargain five years ago, State is now considered an expensive State-supported University. Some parents and students now question the value of a state education and applications for admission have declined. Since a portion of State educational funding is based on a formula tied to enrollments, State has maintained its enrollment levels by going deeper into its applicant pool and accepting less qualified students.

On top of these problems, an increase in the college age population is expected in this decade key members of the State legislature have told the University administration that State will be expected to absorb additional students during this decade. However, because of the economic outlook and the budget situation, State should not expect any funding increases for additional facilities, classrooms, dormitory rooms, or faculty. The University already has a classroom deficit in excess of 25% and class sizes are above the average of their Peer Institutions.

The President of the University MrShekhar, established several task forces consisting of faculty and administrations to address these problems. These groups made a number of recommendations, including the implementation of Total Quality Management (TQM) practices and more in depth focused planning.

Q1) Discuss the general terms how forecasting might be used for planning to address these specific problems?

Q2) Explain the role of forecasting in initiating a TQM approach?

Q3) What are the types of forecasting methods that might be used?

Q4) Describe the Delphi method for forecasting?

CASE STUDY : 4

The Aurora Electronics company has been receiving a lot of customer complaints and returns of a front loading VCR that it manufacturers. When a videotape is pushed into the loading mechanism, it can stick inside with the door open, the recorder cannot run, and it is difficult to get the tape out. Consumers will try to pull the tape out with their fingers or pry the tape out with an object such as knife, pencil or screw driver or hurting themselves.

Q1) What are the different costs of poor quality and costs of quality assurance that might be associated with this quality problem?

Q2) Explain the term quality?

Q3) Discuss the dimensions of quality for manufacturing products?

Q4) Discuss the dimensions of quality for services?