Description
Prepare answers based on CEO questions in the attached document.
You are a newly hired logistics analyst at LUML. Your main duties involve looking at logistics
issues; being a [Jill-of-all-trades] [Jack-of-all-trades]; and an all-around-generalist
Required textbook (for references)
Blanchard, Benjamin (2004).
Logistics Engineering and Management (sixth edition)
Publisher—some printings may show Prentice Hall, Inc; but other printings may show Pearson.
ISBN-10: 0-13-142915-9
ISBN-13: 978-0-13-142915-4
Unformatted Attachment Preview
I suggest that you use MS Word for longer narrative. [Excel is great for math, but Excel is notso-hot for narrative.]
It is often easy to include tables and figures in an MS Word document.
If you solve hard copy, then scan & load that file. Be sure that any scanned work is “readily
legible”. And that the file size is reasonable.
Prepare your answers to the information asked for.
*** From my experience, here is a reminder — double check to make sure that you have
answered all the questions/parts!
The general LUML scenario continues. You are working for the Light-Up-My-Light, Inc. And
need to do certain logistical, analytic, or managerial work. The major topics addressed will be
the course topics; and more specifically usually the material from the current chapter and notes
plus any outside references you use!
Light Up My Light, Inc.
** Mrs. Elise Ennis, CEO
** Mr. Thomas Dollar, the Comptroller (position title is a tad old fashioned but LUML
feels that it is not big enough for a CFO)
** Yourself, senior analyst in the Comptroller’s Office mostly working on programs,
logistics, and general management topics
** Ms. Susan Taylor, Chief Operating Officer.
LUML is a niche manufacturer of light fixtures. Most of the fixtures are “high end” and
have a considerable price tag.
LUML is located in Buffalo, NY. The office is collocated with the manufacturing plant.
LUML distributes the fixtures in the US using a network of eight warehouses throughout the US
including a warehouse located at the Buffalo location. All the warehouses are operated under
contract (e.g., a 3PL, or third-party logistics approach).
The company has a very flexible one-line manufacturing process and can retool quickly
for some 200 designs in its standard catalog. Plus, within its capabilities LUML can do custom
work. LUML has not yet reached the point where it can produce fixtures in very small lots of
each design and still make a profit. But LUML is making progress. As a result, LUML can take
orders for as few as 20 units of any given model and produce them at a profit at market prices.
The CEO (Elise Ennis) holds weekly “staff meetings” which cover the key aspects of the
firm’s operations. Most have returned to the office, but many of the non-production employees
are working from home.
1
As expected, during the last review various information was presented on the status of the
firm’s operations. Several metrics for various functions were presented and the results were
discussed.
The last item on the agenda was a proposal for a special manufacturing program that
would last about a month. Home Depot in the Western New York region approached LUML for
a joint advertising effort to have a special on two of LUML’s high-end LED fixtures: the L911
and the L923. The “L” indicates an LED bulb for the fixture design number 911 or 923. The
special would run starting November 1.
Due to the expected volume LUML operations suggested they suspend normal
production operations. LUML would produce the L911’s and L923’s continuously for 20
production days.
By judicious inventory management LUML managers believe that they will be able to
support the normal customer base PLUS establish this tie-in with the giant Home Depot.
LUML runs one daytime shift Monday through Friday from 8 AM to 5:00 PM. LUML
does not schedule evenings, Saturday nor Sunday, but could do so if needed.
There was consensus by LUML managers that as long as Home Depot was satisfied with
the support HD received in this promotion, this offered at least a good opportunity for a
continuing relationship with a sizeable customer.
There was a brief discussion on the value of critical thinking for a decision of this
magnitude. And the importance of assessing whether LUML could support the production. Mrs.
Susan Taylor, COO, said that she recalled during her coursework while in graduate school that
there were quantitative techniques that could help in their planning. Something about numerical
programming or similar. As if by magic, these techniques could give LUML a good idea of the
best production plan.
The CEO found this to be an interesting general discussion, but somewhat lacking in
detail and hard numbers. In the interest of time, she halted the discussion.
The CEO asked if it would be possible to do a quick analysis of the issues. [Of course,
that was a rhetorical question. As you might expect, the answer from the Comptroller and COO
was “sure we can do an analysis for you”. Even though this meeting was online, you could sense
that they both looked in your direction.]
The CEO said that she would send over some more specific questions after the meeting.
Susan Taylor said that she would send over some information on the Home Depot project that
Operations had been working on.
A brief discussion on how much longer the Corona virus problem would be around. And
then the potential to have a company end-of-summer picnic.
2
The meeting adjourned.
As the senior analyst for the company, you are to play a key role in doing the analysis
and writing the reply to the CEO of the results.
The next day when you open up your email you find a message with the questions that
the CEO had promised to send over.
FWD
To: {your name}
From: Tom Dollar, Comptroller
Date: {date}
Subject: FWD: questions on possible Home Depot – LUML project.
Here are the questions from the CEO.
Remember that the CEO is a numbers freak.
She wants to see the backup; and have a clear but concise explanation on
WHAT-we-are-doing and WHY-we-are-doing it.
Please send a copy to the CEO and me.
Please handle ASAP
Thanks, Tom
To: Tom Dollar, Comptroller
From: Elise Ennis, CEO
Date: {date}
Subject: questions on possible Home Depot – LUML project.
Tom,
Ref the weekly briefing and the discussion on critical thinking and number
programming (or whatever) as a decision aid. Very interesting. Not too often
that we go off on a pretty academic discussion. Nor is it very often that we get
an opportunity like this to tie in with a part of a major national chain like Home
Depot.
Below are the major things that jumped into my mind as the topic was being
discussed and when I got back to my office.
Thank you.
3
Elise
PS. The first question relates to a book that I was reading.
#1 (50 points including 5 points for sources/references) A quality rod and reel
sells for $110. The reel costs $100 more than the rod. How much does the rod
cost? How much does the reel cost? Explain.
#2. (100 points including 10 points for sources/references)
What is critical thinking, anyways? I need an answer that LUML can use.
#3. (100 points. 10 points for sources/references)
How might critical thinking generally help us in formulating our analysis of this
proposal? And then more specifically influence our use of math aids?
#4. (100 points including 10 points for sources/references)
Susan said that she would send over some work that operations had been doing.
What is the result of your analysis? What is the best daily production? For
starts assume that we want to maximize our profits. We can look at other
objectives later on.
#4a. (50 including 5) So how many units of each type do we produce in each
daily cycle? Over the 20-day planned production period?
#4b. (50 including 5) What is the projected profit for each daily cycle? Over the
20-day period?
[NOTE ON NUMERIC ANSWERS]. Prefer (but not required) that you solve
using Excel or similar software. Graphically is also acceptable with reasonable
attention to scale.
In any case the “right” numeric answers are obviously important.
For the number of units to be produced LUML ultimately will need a whole
number (i.e., no three tenths or 0.3 of a fixture). If you think that the answer
involves a fraction, then give interim result to ONE decimal point and then
clearly indicate that you are rounding to the nearest whole number. Example:
If your answer is to produce 25.6 L911’s, then say 25.6 rounded to 26 L911’s.]
#5. (100 points including 10 points for sources/references)
What happens if we do not produce at the best point? The heads of the two
product teams (Tim for L923 and Chuck for L911) are pretty aggressive. Both
might prefer to produce all of their model; and fewer (or even none) of the other
model. What would that do to us profit wise? Would there be an impact on
meeting the commitment to Home Depot?
#6. (100 points including 10 points for sources/references)
4
From what I recall of the discussion we are likely to run into shortages or
“binding constraints”. If we do have some of these, then (a) please clearly
identify them; and (b) offer at least two suggestions for each binding constraint
on how to overcome the constraint.
[Hint: remember that this is a time constrained situation; and limited duration
for 20 production days. Any proposed effort needs to be capable of being
implemented rather quickly. So building a new factory is not a serious solution.
Similarly, in the short run it is unlikely that we can significantly revise the
production process.]
[Hint for #7, #8, #9, #10. What does it mean to add a model? What does it
mean to add a step?]
#7. (25 points including 2.5 for sources/references) If we were to add more
fixture models what happens to the ability to use graphic solutions? Explain.
#8. (25 points including 2.5 for sources/references) If we were to add more
steps in the process what happens to the ability to use graphic solutions?
Explain.
#9. (25 points including 2.5 for sources/reference) If we were to add more
fixture models what happens to the ability to use math programming solutions?
Explain.
#10. (25 points including 2.5 for sources/reference) If we were to add more
steps what happens to the ability to use math programming solutions? Explain.
#11. (25 if answered with other than none or similar—including 2.5 for
references) (0 if answer is “none” or similar). Are there any other comments
that you think I should know. If none, then please be sure to say that so I know
no answer is the answer and not an omission!
-=-=-=Although not directly included in the CEO’s questions, as noted in the
assignment for week 1 there are other academic grading elements. These
include with typical weights:
E1. (Variable depending upon how late) Timely submission.
E2. (10) Posting to Canvas.
E3. (10) APA document format.
E4. References for ideas, etc. that are not your own.
(typically, 10 percent of each answer) in-text citations are a part of EACH
question/answer.
(10) reference list.
E5. (varies with each question) The ability to easily find the answer.
5
[Seemingly far-fetched example: do not include part of the answer to one
question (say Q#2) in another answer (say Q#7). It is NOT the reader’s job to
be looking for prepositional phrases and other “tidbits” of possible parts of the
answer. Similarly, do not bury the answer (e.g., produce 22 L911’s) deep in a
lengthy paragraph.
-=-=
A note:
date
To Tom Dollar
Tom. Here is the information on the possible Home Depot project that
Operations had pulled together that I promised I would send over.
BTW I looked up some of my old class notes. The name is really
“mathematical programming”.
Susan
-=-=** There are 3 steps for producing either fixture: inspection, storage, and
assembly.
** Believe that Elise would like to make the most profit on this deal as we can.
** We manage on the basis of daily production.
** Marketing says that Home Depot will accept any quantity of each fixture since
HD anticipates being able to sell all that we can produce. But we need to produce
SOME of BOTH fixtures each day.
** Production cycle is one 8-hour day.
** For each L923 fixture we need 2 hours of inspection; 4 hours of assembly; and
3 cu ft of storage until picked up.
** For each L911 fixture we need 3 cu ft of storage; 1 hour of inspection; and 10
hours of assembly.
** Each day we currently have 220 hours of inspection time; 390 cu ft of storage
space; and 1000 hours of assembly time.
** Pickup is usually scheduled for once a day at 5:30 PM after the production line
has closed.
** We currently employ people in 3 classifications: assemblers;
warehouse/storage specialists; and inspectors.
** Storage is managed by volume and not by work hours.
** Currently there is no real cross training.
6
** We estimate that L911 will cost $850 to produce; and L923 will cost $540 to
produce. Those are very firm.
** For the purposes of this analysis the costs are “loaded” (e.g., include items such
as taxes, depreciation, overhead, other miscellaneous costs, etc.).
** L911 should sell to HD for $900; L923 for $600.
** The retail price will be determined by HD.
** Logistics anticipates no problem getting the needed supplies and parts.
** As long as we plan ahead for a period of 20-production-days we can dedicate
all production to these two models. We are confident that we can manage current
customers and other fixture models thru inventory.
-=-=-=Your job as senior analysis is to ……
Prepare the answers to the CEO’s questions. One key reason that we do this type of analysis is
to help manage better, solve problems, and the like. So, interpreting the information in relation
to the business situation is important.
Keep in mind:
#1 not everyone who reads the answers will know the questions that were asked. Consider
including both the Q & A.
#2 the answer to each question needs to be easily identifiable. The CEO is probably not
going to remember the details of every question that she asked. And she is unlikely to “go
looking” for the answer somewhere in a document.
PLUS, you want to be sure that you have indeed answered all the parts of all the questions.
#3 Each answer needs to have the answer plus supporting rationale and work. That does not
mean that each answer needs to be pages long! The answer itself and the rationale can easily
only be a couple of sentences. In many cases the back-up math will fit neatly in the memo itself.
For others you can reference an attachment. But be specific as to where the answer is found.
“See attachment A” is not very specific. “For the profit computation see cell C22 in
attachment A” is more specific and gives the reader a fighting chance at finding the answer.
#4. As the old saying goes, sometimes a picture/figure can be worth a thousand words. On
the other hand, a picture with no explanation might not be much of a help.
#5. This is also an academic work so include sources/references. Recall that APA standard
convention is in-text citation and then a reference list at the end (except for personal
communications of which there tend to be very few in these type assignments).
In any case, we do NOT want to use only a URL nor a WIKI-type source unless it is the
only remaining option (you need to justify!).
#6 Remember that according to the grading guidelines, work that is only from the book and/or
notes typically is not usually “excellent”
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