OPERATIONS MANAGEMENT CASE STUDY

GROUP MEMBERS (G3) ANNE SHARON GM04816 NURUL HAWA GM04797 NUR HIDAYUNI GM04744 MUZHAFFAR OMAR GM04790 YOKA LETCHUMY GM04767

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Contents

INTRODUCTION AND CONCEPT

2
3 4

QUESTION 1

QUESTION 2

QUESTION 3

QUESTION 4

NEW VENTURE
Vikky Roberts owner of RASAS has a soft spot for high performance mustang cars Recently she acquired one which needs a lot of restoration

She is also aware that there is a growing demand

for these vintage cars She needs help in assessing the feasibility of this business

REASONS??
The public want the thrill of restoring an old car But they do not own time to run down all the old parts Others just want to own a vintage car for its uniqueness Many are rich enough to pay someone else to restore an auto for them

MEETING THE DEMAND OF BOTH GROUPS

Approach
1. Assemble a library of parts and body manuals for old cars for customization purposes 2. Offers help in compiling part list and RASAS could acquire the parts for them

1. Serving as a part brokers for NOS 2. Machine new parts to replicate those which are rare 3. Take charge of the entire if restoration

BASIC RESTORATION Gets the car looking great and running

MINT RESTORATION 1. 2. 3. 4. Puts the car back in original condition Commands a higher price when resold Can be customized Accept any kind of restoration a customer want

Various categories of Restoration

WHAT NEEDS TO BE DONE??

Requested the service operations director to

observe her mustang

Decide the suitable approach to restore it into a brand new car The due date is before the exhibition at the Detroit Auto Show

A report must be prepared to determine a few

aspects

Restoration steps Competitive priorities

Aspects of proposed business

CONTENT OF THE REPORT

Project Duration and Budget

Productivity cost

PROJECT MANAGEMENT
Work breakdown schedule Network planning (PERT or CPM) Schedule of project activities

Develop a risk management plan

Analyze cost time trade off

Steps in PERT
Establish the relationship among activities (PRECEDENCE DIAGRAM) Assign cost and time estimates for each activities

Identify critical paths and slack activities

Use the network plan to monitor and control the project

Competitive priorities of the new proposed business

RASAS knowledge and experience in

automobile industry is an advantage for it to

construct the new business- restoring vintage automobile. However, considering the competitive priorities can ensure a better performance of the business.

Competitive Priorities
COST
Diversifying the business will lead to a higher cost. .

Minimize the Costs

Production system operates efficiently Controlling the product cost Acquire the parts at existing auto parts stores. Recruiting skillful and capable workers

www.themegallery.com

Competitive Priorities
QUALITY
Value for price paid is a definition of quality that consumers often use for product or service usefulness.

Error-free products and servicesdecreasing trend in rejections, reworks, customer complaints.

Customer relation improvement

www.themegallery.com

Competitive Priorities
Flexibility

Accept any kind of restoration a customer wants Restoring vintage automobile does fit the demand of current market
restore the old car for customer who are really keen on vintage cars.
www.themegallery.com

Competitive Priorities

Customer services

provide good services to attract the target customers . Focus on the delivery time of the cars

Has sufficient spare parts in store. Consult customers - designing their vintage car.

Provide the after-sale service to gain market share

www.themegallery.com

Construct a table containing the project activities using the letter assigned to each activity, the time estimates and the precedence relationship.

TABLE OF PROJECT ACTIVITIES

Activity A Detail Order all needed material and parts (upholstery, windshield, carburetor, and oil pump) Receive upholstery material for seat covers. Cannot be done until order is placed Receive windshield. Cannot be done until order is placed Receive carburetor and oil pump. Cannot be done until order is placed Remove chrome from body. Can be done immediately Remove body(doors, hood, trunk, and fenders) from frame. Cannot be done until chrome is removed Have fenders repaired by body shop. Cannot be done until body is removed from frame Predecessor Time 2

30

C D E F

A A E

10 7 1 1

Activity H I J K

Detail Repair doors, trunk, and hood. Cannot be done until body is removed from frame Pull engine from chassis. Do after body is removed from frame Remove rust from frame. Do after the engine has been pulled from the chassis Regrind engine valves. Do after the engine has been pulled from the chassis

Predecessor F F I I

Time 6 1 3 5

Replace carburetor and oil pump. Do after engine has been pulled from chassis and after carburetor and oil pump have been received
Rechrome the chrome parts. Chrome must have been removed from the body first Reinstall engine. Do after valves are reground and carburetor and oil pump have been installed

I,D

M N

E K,L

3 1

Put doors, hood, and trunk back on frame. The doors, hood, and trunk must have been repaired first. The frame must have had its rust removed first

H,J

Activity P

Detail Rebuild transmission and replace brakes. Do so after the engine has been installed and the doors, hood, and trunk are back on the frame Replace windshield. Windshield must have been received Put fenders back on. Fenders must have been repaired first the transmission rebuilt, and the brakes replaced Paint car. Cannot be done until the fenders are back on and windshield replaced Reupholster interior of car. Must have received upholstery material first. Car must have been painted first Put chrome parts back on. Car must have been painted and chrome parts rechromed first Put car to the Detroit Auto Show. Must have completed reupholstery of interior and have put the chrome parts back on

Predecessor N,O

Time 4

Q R

C G,P

1 1

S T

R,Q B,S

4 7

U V

S,M T,U

1 2

Draw a network diagram of the project similar to figure 2.4.Determine the activities on the critical path and the estimated slack for each activity

S= 0
A 0 0 2 2 B 30

S= 0
2 2 32 32 T 7

S= 0
32 32 39 39

S T A R T

S=15
C 10 2 17 12 27 Q 1

S=15
12 27 13 28 S 4

S=15
13 28 17 32 V 2

S= 0
39 39 41 41

S=26
D 7 2 28 9 35 L 1

S=26
9 35 10 36 R 1

S=21
6 27 7 28 U 1

S=21
17 38 18 39

S=21
E 0 1 F

S=21
1 2 G

S=21
2 6

21 22

22

23

23

27

S=34
M 3 1 35 4 38 H 6

S=28
2 30 8 36 N 1

S=26
10 36 11 37 P 4

S=26
11 37 15 41

S=27
I 1 2 29 3 31

S=30
J 3 3 33 6 36 O 1

S=28
8 36 9 37

F I N I S H
41 days

S=28
K 5 3 31 8 36

$100
A 0 0 2 2 B 30

$2100
2 2 32 32 T 7

$2400
32 32 39 39

S T A R T

$800
C 10 2 17 12 27 Q 1

$100
12 27 13 28 4

$1700
S 13 28 17 32 V 2

$1000
39 39 41 41

$1750
D 7 2 28 9 35 L 1

$200
9 35 10 36 R 1

$100
6 27 7 28 U 1

$100
17 38 18 39

$200
E 0 1 F

$300
1 2 G

$1000
2 6

21 22

22

23

23

27

$210
M 3 1 35 4 38 H 6

$1500
2 30 8 36 N 1

$200
10 36 11 37 P 4

$2000
11 37 15 41

$200
I 1 2 29 3 31

$900
J 3 3 33 6 36 O 1

$240
8 36 9 37

F I N I S H

$1000
K 5 3 31 8 36

Critical path A B T V = 41 days

Prepare a project budget showing the cost of each activity and the total for the project. Can the project be completed within the budget?

ACTIVITIES A B C D E F G

COST ($) 100 2100 800 1750 200 300 1000

H
I J K L

1500
200 900 1000 200

210

N
O P Q R S T U V TOTAL COST

200
240 20 00 100 100 1 700 2 400 100 1 000 18 100

Total project cost = $ 50 000 + $ 18 100 = $ 68 100

The project cost is within $ 70 000, thus it can be completed within the budget.

Will the project require more than $3600 in any week? If problems exist, how might Roberts overcome them?
Assumptions *Activities B,C and D must be paid for when the item is
received *The costs of all activities that spam more than one week can be prorated *Each week contains five work days

GANTT CHART
F:\gantt chart mustang.doc

The activities cost from day 7 to day 12 = $( 850 + 640 + 250 + 350 + 650) = $ 2 740 <$3,600 However, The activities cost from day 3 to day 7 = $( 1170 + 1470 + 1400 + 850 )= $ 6 290 >$3,600

How to overcome the problem?

Robert can start some activities later since some activities have slack time; such as slack for activity k = 14 days

CONCLUSION
CPM/ PERT are very handy when it comes to project planning because : Assist managers to plan and manage resources effectively Monitor schedules and cost RASAS will be able to complete the project before the display in Detroit within the required timeline and budget

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