OPERATIONS of current process is one batch consisting

     OPERATIONS MANAGEMENTGroup – GSection – BCase Submission: Executive Shirt Company Inc.    Submitted by:Sravani Cherukupalli (1701075)Piyush Chimankar (1701076)John Bhaaswanth D (1701085)Keerthana Babu (1701087)Nisha P (1701095)Nitin Jaganath R (1701096) Q1) Current Production Process  The production type for Executive shirt company Inc is make to order. The flow unit for analysis of current process is one batch consisting of 60 shirts of 8 patterns.Calculations:  Actual Cycle time –The total time taken for the process to get complete that is given by Total labor time available / Total shirts produced For Regular- (20*8*60)/16000 = 0.

6 minutes per shirt, For mike’s- (20*8*60)/18000 = 0.533 min per shirt, For Ike’s Custom process- (20*8*60)/2000 = 4.8 min per shirt, For Ike’s regular process – 0.67 min per shirtWIP Inventory – WIP is company’s partially completed goods waiting to get completed given by addition of average number of 60- shirt batches* number of shirtsFor Regular – 196 batches * 60 shirts/batch = 11760 shirts, For mike’s-  396 batches * 5 shirts/batch = 1980 shirts, For Ike’s Custom process- 15*3 + 5 = 50 units, for Ike’s regular – 151 batches * 60 shirts/batch = 9060 shirtsIdeal Cycle time – It is the time required for the bottle neck in the process. In our case we can see that from exhibit- 3 the bottle neck is the process of making cuffs which takes 2/4= 0.5 minutes/shirt (For regular), 0.5 minutes/shirt (for mike’s process), 3.

Best services for writing your paper according to Trustpilot

Premium Partner
From $18.00 per page
4,8 / 5
4,80
Writers Experience
4,80
Delivery
4,90
Support
4,70
Price
Recommended Service
From $13.90 per page
4,6 / 5
4,70
Writers Experience
4,70
Delivery
4,60
Support
4,60
Price
From $20.00 per page
4,5 / 5
4,80
Writers Experience
4,50
Delivery
4,40
Support
4,10
Price
* All Partners were chosen among 50+ writing services by our Customer Satisfaction Team

9 minutes/shirt (for Ike’s custom process), 0.67 (For Ike’s Regular). Production Capacity: It is the capacity of bottle neck is given by time available in minutes/ Ideal Cycle time.For Regular- (8*60) / 0.5 = 960 shirts per day, For mike’s- (8*60) / 0.5 = 960 shirts per day, For Ike’s Custom process- (8*60) /3.9 = 123.1 shirts per day, For Ike’s regular process-(8*60) / 0.

67 = 720 shirts per dayActual Production capacity – Number of shirts which are actually being produced and it is given by time available in minutes/ actual cycle time. For regular-(8*60)/0.6 = 800 shirts per day, For mike’s- (8*60)/0.533 = 900 shirts per day, For Ike’s Custom process-(8*60)/4.

8 = 100 shirts per day, For Ike’s Regular- (8*60)/0.6 = 800 shirts/day.Capacity Utilization – It is the actual capacity which is being utilized and it is given by Production capacity/ actual production capacity. For regular- 800/960 = 83.33%, For mike’s-900/960 = 93.

75%, For Ike’s Custom process- 100/123.1 = 81.21%, For Ike’s regular process – 800/720 = 111.

11%Manufacturing lead time -It is the time taken since the order is initiated and completedFor regular- WIP inventory/production capacity = 11760/800 = 14.7 days, For Mike’s – 1980/900 = 2.2 days, For Ike’s regular- 9060/800 = 11.33 days, For Ike’s customized- 50/100 =0.5 daysDirect labor content – cutting time + time for other operations is (((90+30)/480) *4) +25.

51 = 26.51 min per shirt, For Mike’s- (90+30)/480 *4 + (0.5*1) +25.51 = 27.01 min per shirt, For Ike’s regular- (90+30)/480 *4 +25.51 = 26.

51 min per shirt, For Ike’s custom- (0.5*1) +25.51 = 26.01 min per shirtDirect labor utilization: total time taken / total time available. For regular- (26.51*800) / (64*8*60) = 69%, For Mike’s- (27.

01*900) / (65*8*60) = 77.9%, For Ike’s regular- (26.51*900) / (49*8*60*111.11) = 81.1%, For Ike’s custom- (26.01*100) / (16*8*60) = 33.

9%Direct labor cost =-For regular-(64*6*8) = 3072/800 shirts = 3.84 $ per shirt: For Mike’s- (65*6*8) = 3120/900 shirts = 3.47 $ per shirt, For Ike’s regular- (49*6*8) +(49*9*53.33/60) = 2743.9/800 shirts = 3.

43 $ per shirt: For Ike’s custom- (16*6*8) = 768/100 shirts = 7.68 per (16 *6*8) = 768/100 shirts = 7.68 $ per shirt   Current ProcessRegular shirts Mike’s Plan Regular & Custom shirts                  Ike’s Plan Regular                      Custom Shirts                            Shirts Actual Cycle time (min/shirt) 0.

6 0.533 0.674 4.8 Manufacturing lead time (days) 14.7 2.2 11.33 0.5 WIP Inventory (shirts) 11760 1980 9060 50 Production Capacity (shirts/day) 960 960 720 123.

1 Capacity utilization 83.33% 93.75% 111.11% 81.21% Direct Labor Content (min./shirt) 56.51 27.01 26.

51 26.01 Direct Labor Utilization 69 77.9 81.1 33.9 Direct Labor Cost ($/shirt) 3.84 3.

47 3.43 7.68  Q2) Comparison between Mike’s plan & Ike’s planBased on the calculations, we can see that overtime is not required for Mike’s plan. However, an overtime of 53.3 min/day (0.

11*60*8). So, the total labor cost/regular shirt will be calculated as follows. Overtime wages = (53.33* $9 / 60) = $8 /worker/dayOvertime wage/shirt = 8 * 49 / 800 = $ 0.5/shirt?Total Labour cost = 4.5 + overtime cost = 4.

5 + 0.5 = $5/shirt Also, from the case we can see that the raw material cost for customized shirts are 10% higher. After plugging in the calculated values and other values given from Exhibit 4, the below table can be derived. Mike’s plan Ike’s plan Regular Custom Regular   Custom  Number of shirts (per month) 16000 2000 16000   2000 Raw material cost 7 7.7 7   7.7 Total labour cost 4.

5 4.5 5   4.5 Indirect cost 4.5 4.5 4.

5   4.5 Total manufacturing cost 16 16.7 16.5   16.

7 Wholesale price 25 35 25   35 Profit 144000 36600 136000   36600         Conclusion:Based on the above table, we can see that the profit for Mike’s plan is higher by $8000 ($144000+$36600-$136000-$36600). Also, the manufacturing lead time for Mike’s process is efficient when compared to the industry average of six weeks. Therefore, we recommend to go with Mike’s plan.