Hampshire Farms is a locally operated campground and micro-brewery on the west coast ofNewfoundland. For many years it was a family farming operation; it has gradually beenconvertedtoavibrantcampgroundandcurrentlyhas400campsites;thecurrentowners,Craigand Melanie Hampshire, have added a micro-brewery on location. The campground operatesfrom the May 24^th weekend until Thanksgiving weekend each year - 20 weeks in total (7 days aweek);thebreweryoperates 365 daysayear.

As part of the micro-brewery, the Hampshires operate a bar that sells its beer and otherproducts and provides a venue for local entertainment. Campers and the general publicregularly frequent the bar. Demand for the beer is great and Hampshire sells their productsthroughout the province. Twice a year, they purchase bottles and caps from a localentrepreneur and store the inventory in one of the old unoccupied farm buildings. Bottles areincontainersof60 andcapsin bagsof 600.

They are currently planning their production schedule for the next six months (April -September) for their two beers: Polar Ice and Red Belly. Aggregate forecasts for both beers isas follows(bottles):

April	May	June	July	August	September
7,000	8,000	12,500	13,300	14,400	11,900

Hampshire currently has 10 employees who, based on regular work hours, each produce 800bottles per month; if overtime is used, a maximum of an additional 5,000 bottles per monthcan be produced. They currently have 2,000 bottles in inventory and they like to have 3,000bottlesonhandattheendofSeptember.Various costs associatedwithproductionare:

Item	Cost	Item	Cost
Regularwagerate(10 employees)	$35/bottle	Inventorycost	$5/bottle/month
Overtimewagerate(10 employees)	$55/bottle	Backordercost	$45/bottle/month

Melanie is currently working on her MBA and has just completed a course in OperationsManagement. One of her topics was JIT/Lean Manufacturing and she feels they should considerthis for how they order bottles and caps for the brewery operations. They have received thefollowing orders for April from their commercial customers, that they deliver on Friday of eachweek:

Friday,April7	Friday,April14	Friday, April21	Friday, April28
1,050	1,200	1,390	1,520

They don't want to have any less than 100 bottles and 500 caps on hand at any time. It takes 3days to receive the caps from their supplier, Caps R Us; 6 days to receive the bottles from theirsupplier, Just Bottles. They also need to have the bottles and caps the day prior to the Fridaydelivery.

Hampshire Farms sells their beer at their brewery to the general public is 6-pack cartons. Craighas been able to arrange a few different delivery options from their supplier of the 6-packcarton. The cartons come in packages of 100 cartons and cost $200 per package. They order 2000 cartons at a time. Annual holdingcostsare$600perpackageandfreight costsperorderforeachoptionareasfollows.

DeliveryOption	FreightCost
2Day	$1,000
6Day	$400
14Day	$150

In the campground, each campsite has a fire pit and each year Hampshire has to replace 30% ofthem.They currentlypurchasethesefirepits fromacompanybasedinNovaScotia.They pay

$250 each and transportation costs are $400 for a package of 10 firepits. They recently becameaware of a local supplier in Lewisporte who charges $200 each and transportation costs are $25each. Another option is to utilize the old farm maintenance building and make the fire pitsthemselves. Craig and Melanie have determined that this would cost them $75 each formaterials,$100 each inlabourand annual fixed costsof $5,000.

Hampshire Farms provides firewood in bundles for their guests to purchase. The Hampshirespurchase firewood from a local supplier, with ordering costs of $50 per order and holding costsof $2.00 per bundle. Demand averages 500 bundles per day. Currently they purchase 500bundles atatime fromtheirsupplier.

Craig and Melanie are considering utilizing forested unused land to produce their own firewood(with an appropriate reforestation plan). Based on their research, they have determined theyhave capacity to produce 800 bundles per day, with demand of 500 bundles per day. Setupcosts of the machines to chop the wood into firewood is $25 and holding costs are $5 for thefinished bundle. They are also considering making kindling in the firewood production facilitywhen they are not making the firewood bundles. It would take a quarter of a day for set up andhalf a dayforproduction ofthekindling.

Q1. AdviseHampshireFarms whethertheyshould continuetopurchase thefirepits from their Nova Scotia supplier, or if they should use the Lewisporte supplier or producethefirepitsthemselves.

Q2. Besidescosts,whatotherfactors shouldbeconsideredwhendecidingtomakeorbuythefirepits?

Q3. AdviseHampshireFarmswhattransportationoptiontheyshouldchoosefortheir6-packcartons.Which project management technique is more useful in a mid-size healthcare system: CPM or PERT?Which project management technique is more useful in a mid-size healthcare system: CPM or PERT?