Exhibit 3

Current Production of Regular shirts at ESC. Inc.

Average WIP
Number of (number of 60 shirt
Type of Operation Number of Worksers Machines batches)
Cutting 4 1 16
Sewing 48 48 144
Inspection 4 12
Ironing 4 4 12
Packaging 4 12

Regular Shirts
Labor Content
S.No Operation (minutes per shirt) Number of workers
1 Cutting
2 Make Collar 3.9 8
3 Make cuffs 2 4
4 Make sleeves 0.65 2
5 Make front 2.5 6
6 Make back 1.7 4
7 Join shoulders 0.66 2
8 Attach collar 1.65 4
9 Attach sleeves 1.55 4
10 Stitch down sleeves 0.65 2
11 Sew side seam 1.8 4
12 Attach cuffs 1.55 4
13 Hem bottom 1.7 4
14 Inspect 1.5 4
15 Iron 1.95 4
16 Fold, package 1.75 4
Exhibit 5
Mike's plan for regular and custom shirts

Average WIP (number

Type of Operation Number of Worksers Number of Machines of 5 shirt batches)
Cutting 5 2 36
Sewing 48 48 288
Inspection 4 24
Ironing 4 4 24
Packaging 4 24
Exhibit 6
Ike's plan for Regular and Custom shirts

Number of Number of Average WIP (number

Type of Operation Worksers Machines of 60 shirt batches)
Cutting 4 1 16
Sewing 36 36 108
Inspection 3 9
Ironing 3 3 9
Packaging 3 9
Exhibit 4
Cost structure for a Standard-sized shirt (current production process)

Raw materials $7
Total Labour (Direct+Indirect*) $5
Other Indirect Costs $5
Total Manufacturing Cost $16
Wholesale price $25
Retail price $50

* Indirect labor costs include costs of material handling and supervisory labor
 Compute the following quantities for the current production process as well as for
Question 1 case

Current Process Mike's plan Ike's plan

Regular
Regular Shirts Regular and Custom Shirts shirts
Actual Cycle Time (min/shirt)*
Manufacturing Lead time (days)
WIP Inventory (shirts)
Prdocution Capacity (shirts/day)**
Capacity Utilization
Direct Labor Content (min/shirt)
Direct Labor Utilization (%)
Direct Labor Cost ($/shirt)

* Assume 8-hour work dat, or 8 hours plus overtime if necessary

** Assume 8-hour work day

Compare the two plans, in terms of both regular shirt production and custom-shirt p
Question 2
duction process as well as for Mike's and Ike's plans assuming te plans are implemented as described in the
case

Ike's plan

Custom shirts

production and custom-shirt production. Base on your analysis, what is the recommendation for Dwight Collier? ( Enter your answer belo
Maximum 600 words)
er? ( Enter your answer below -