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Sullivans Flooring Concept Case Solution

Solution Id Length Case Author Case Publisher
947 1066 Words (4 Pages) John S. Haywood-Farmer, Julie Harvey Ivey Publishing : 907D10
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Since Sullivan was running a one-man operation, he manufactured the boards himself. He also used to install the boards on weekends. However, the plan is to allocate the additional worker to the manufacturing process that is tedious given the increase in demand for these boards. The one additional worker will serve as a marginal utility for the manufacturing process. This will result in an increase in production capacity because of an increased time efficiency in the board manufacturing process. The production of a single board currently takes up to 15 minutes in which labor-intensive processes such as the jointing process could be reduced significantly. The jointing process took about four minutes per board that was substantially time consuming. This was because it required to achieve lap formation that needed to be checked multiple times to assess its consistency. This process was also the most vulnerable to errors that could result in the board, and therefore, the time allotted to the other manufacturing steps being wasted.

Following questions are answered in this case study solution

  1. If Sullivan hires one additional worker, how can the manufacturing operation be allocated between workers to reduce the time to manufacture each board? How will production capacity be affected without other changes to the manufacturing operation?

  2. Repeat question 5 for hiring two additional workers.

  3. Use the least cost approach to evaluate the proposed changes to the manufacturing operation. Which option (router, one additional worker, or two additional workers) is most cost effective? Use the profit maximizing approach to evaluate the proposed changes. What does this analysis reveal about each option?

Case Analysis for Sullivans Flooring Concept

One worker can be allocated to jointing that would result in the person gaining expertise in that single step. Since the jointing process took four minutes and the next processes took five minutes, allocating these last steps to the additional worker can result in time efficiency. The time in which the worker would be doing the last of the steps, Sullivan can proceed to the production of the other boards. However, another alternative is that Sullivan keeps the last of the steps to himself because of the complexity and the steps being prone to error, and allocate the initial steps to the worker. Since the last processes include rechecking the product for finishing, Sullivan should take the last steps. However, with time, the worker can be trained to efficiently handle the complex processes. The worker and Sullivan can be rotated; one day, the worker can take up the initial steps, and in another day, Sullivan can take up the initial steps of the process.

Repeat question 5 for hiring two additional workers.

Step

Minutes Allotted

Cumulative Time

Planning

5 minutes

5 minutes

Damaged Parts Cutting

1 minute

6 minutes

Lap Jointing

4 minutes

10 minutes

Drilling

4 minutes

14 minutes

Final Modifications

1 minute

15 minutes

Above is the distribution of the time allotted for each step in the board manufacturing process. In the above question, the only limitation was that the time was not equally divided among the workers manufacturing the boards. This might have resulted in the worker being free for some time or Sullivan being free while the worker completes the initial processes. In hiring two workers, the division can be made equivalently. This would mean that the process runs like a factory line manufacturing. In this, the task of Planning would be assigned to one worker, the tasks of cutting damaged parts and lap jointing would be consolidated and assigned to the second worker, and the last tasks of drilling and final modifications can be assigned to the third worker. This would equally distribute 5 minutes each among the workers. The manufacturing time would, therefore, be reduced from 15 minutes to approximately 5 minutes. Even though at times, the assembly line could incur problems if the wood is difficult to process, at an approximate, this would be an ideal assembly line for manufacturing these boards.

In the case, it was mentioned that planning was a difficult and time consuming process because only one worker handled the large boards. However, allotting workers to helping in the planning process would affect the other steps and their time consumed. This planning process can be simplified using the mechanical system for lap jointing that would also decrease the errors and this would result in a decreased time in installation. However, the reduction of time in this alternative is only 1 minute that is not substantial. Also, the recovery of the machine’s price would take a long time that is not feasible given the utility that is derived from it.

Use the least cost approach to evaluate the proposed changes to the manufacturing operation. Which option (router, one additional worker, or two additional workers) is most cost effective? Use the profit maximizing approach to evaluate the proposed changes. What does this analysis reveal about each option?

1. Least Cost Approach

The least cost approach evaluates the three alternatives based on the lowest cost and recommends the method that is least expensive for the business.

 

Router

One Worker

Two Workers

Installation/ Initial Charges

$4000

-

-

Annual Charges

$1000

$4800

$9600

Total Annual Charges

$5000

$4800

$9600

According to the least cost approach, the alternative of one worker hired for the distribution of steps would be the most cost efficient. This is because even though the installation of the router is less expensive yearly, the initial charges of the purchase and the installation of such a new machine are greater. Even though $200 less than the installation of the router, the one worker alternative is the most cost efficient of all the three options.

2. Profit Maximizing Approach

The profit maximizing approach considers the alternative as the best that maximizes the profits and does not take into consideration the costs of the alternative.

Anticipated Manufacturing/ Demand – 1200

Square feet per board – 12 x 10 = 120

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