OPS Management Assignment……. problems
1. Davis Instruments Davis Instruments has two manufacturing plants located in Atlanta, Georgia. Product demand varies considerably from month to month, causing Davis extreme difficulty in workforce scheduling. Recently Davis started hiring temporary workers supplied by workforce unlimited, a company that specializes in providing temporary employees for firms in the greater Atlanta area. WorkForce Unlimited offered to provide temporary employees under three contract options that differ in terms of the length of employment and the cost. The three options are summarized: Option Length of Employment Cost 1 One month $2,000 2 Two months $4,800 3 Three $7,500 The longer contract periods are more expensive because WorkForce Unlimited experiences greater difficulty finding temporary workers who are willing to commit to longer work assignments.Over the next six months, David projects the following needs for additional employees: Month January February March April May June Employees Needed 10 23 19 26 20 14 Each month, Davis can hire as many temporary employees as needed under each of the three options. For instance, if Davis hires five employees in January under Option2, WorkForce Unlimited will supply Davis with five temporary workers who will work two months: January and February. For these workers, Davis will have to pay 5 ($4800) = $24,000. Because of some merger negotiations under way, Davis does not want to commit to any contractual obligations for temporary employees that extend beyond June. Davis’s quality control program requires each temporary employee to receive training at the time of hire. The training program is required even if the person worked for Davis Instruments in the past. Davis estimates that the cost of training is $875 each time a temporary employee is hired. Thus, if a temporary employee is hired for one month. Davis will incur a training cost of $875,but will incur no additional training cost if the employee is on a two-or three-month contract. Managerial Report Develop a model that can be used to determine the number of temporary employees Davis should hire each month under each contract plan in order to meet the projected needs at a minimum total cost. Include the following items in your report: a) A schedule that shows the number of temporary employees that Davis should hire each month for each contract option. b) If the cost to train each temporary employee could be reduce to $700 per month, what effect would this change have on the hiring plan? Explain. Discuss the implications that this effect on the hiring plan has for identifying methods for reducing training costs. How much of a reduction in training costs would be required to change the hiring plan based on a training cost of $875 per temporary employee? 2. Carlson Department Store (Forecasting) The Carlson Department Store suffered heavy damage when a hurricane struck on August 31. The store was closed for four months (September through December), and Carson is now involved in a dispute with its insurance company about the amount of lost sales during the time the store was closed. Two key issues must be resolved: (1) the amount of sales Carlson would have made if the hurricane had not struck, and (2) whether Carlson is entitled to any compensation for excess sales due to increased business activity after the storm. More than $8 billion in federal disaster relief and insurance money came into the county, resulting in increased sales at department stores and numerous other businesses. The attached excel file give Carlson’s sales data for the 48 months preceding the storm. Tale 15.20 reports total sales for the 48 months preceding the storm for all department stores in the county, as well as the total sales in the county for the four months the Carlson Department Store was closed. Carlson’s managers asked you to analyze these data and develop estimates of the lost sales at the Carlson Department Store for the months of September through December. They also asked you to determine whether a case can be made, Carlson is entitled to compensation for excess sales it would have earned in addition to ordinary sales. Carlson Department Store County Sales Month Year 1 Year 2 Year 3 Year 4 Year 5 January 46.8 46.8 43.8 58 February 48 48.6 45.6 51.6 March 60 59.4 57.6 57.6 April 57.6 58.2 53.4 58.2 May 61.8 60.6 56.4 60 June 58.2 55.2 52.8 57 July 56.4 51 54 57.6 August 63 58.8 60.6 61.8 September 55.8 57.6 49.8 47.4 69 October 56.4 53.4 54.6 54.6 75 November 71.4 71.4 65.4 67.8 85.2 December 117.6 114 102 100.2 121.8 Managerial Report Prepare a report for the managers of the Carlson Department Store that summarizes your findings, forecast, and recommendations. Include the following: a) An estimate of sales for Carlson Department Store had there been no hurricane b) An estimate of countywide department store sales had there been no hurricane c) An estimate of lost sales for the Carlson Department Store for September through December d) In addition, use the countywide actual department stores sales for September through December and the estimate in part (2) to make a case for or against excess storm-related sales. e) How accurate are the above models?