Name: -- .Gabrielle Gagne
Qs0 205 Introduction to Operations Management
Week 1 Assignment
Introduction to Operations Management
Instructions
This assignment is to be done individually. This is not a group assignment.
Word-process your answers within this document. Do not create a new document.
This assignment is due before the next class. Please submit through Assignment 1 Submission folder on Brightspace. The folder will not be accessible after 8 AM next Monday.
You can submit up to one late/redone assignment prior to the midterm exam through the Late/Redo Assignment Submission folder on Brightspace.
Case: Chad's Creative Concepts
Read the following case thoroughly and answer the questions given at the end of the case.
Chad's Creative Concepts designs and manufactures wood furniture. Founded by Chad Thomas on the bank of Lake Erie in Sandusky, Ohio, the company began by producing custom made wooden furniture for vacation cabins located along the cost of Lake Erie and on nearby Kelly's Island and Bass Island. Being an "outdoors" type himself, Chad Thomas originally wanted to bring "a bit of the outdoors" inside. Chad's Creative Concepts developed a solid reputation for creative design and high quality workmanship. Sales eventually encompassed the entire Great Lakes region. Along with growth came additional opportunities.
Traditionally, the company focused entirely on custom made furniture, with the customer specifying the kind of wood from which the piece would be made. As the company's reputation grew and sales increased, the sales force began selling some of the popular pieces to retail furniture outlets. This move into retail outlets led Chad's Creative Concepts into the production of a more standard line of furniture. Buyers of this line were much more price sensitive and imposed more stringent delivery requirements than did clients for the custom line. Custom- designed furniture, however, continued to dominate sales. Currently, the company operates a single manufacturing process in Sandusky, where both custom furniture and standard furniture are manufactured. The equipment is mainly general purpose in nature to provide the flexibility needed for producing custom pieces of furniture. The layouts put together saw in one section of
the facility, lathes in another, and so on.The guality of the finished product reflects the guality of
the wood chosen and the craftsman ship of the individual worker. Both custom and standard furniture compete for processing time on the same equipment by the same craftspeople.
During the past few months, sales of the standard line steadily increased, leading to more regular scheduling of this product line. However, when scheduling trade offs had to be made, custom furniture was always given priority because of its higher sales and profit margins. Thus, scheduled lots of standard furniture pieces were left sitting around the plant in various stages of completion.
As he reviews the progress of Chad's Creative Concepts, Chad Thomas is pleased to note that the company has grown. Sales of custom furniture remain strong, and sales of standard pieces are steadily increasing. However, finance and accounting indicate that profits are not what they should