Chads Creative Concepts designs and manufactures wood furniture. Founded by Chad Thomas on the banks 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 Kellys Island and Bass Island. Being an outdoors type himself, Chad Thomas originally wanted to bring a bit of the outdoors inside. Chads Creative Concepts developed a solid reputation for creative designs 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 companys reputation grew and sales increased, the sales force began selling some of the more popular pieces to retail furniture outlets. This move into retail outlets led Chads 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 dominate sales, accounting for 60 percent of volume and 75 percent of dollar 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 layout puts together saws in one section of the facility, lathes in another, and so on. The quality of the finished product reflects the quality of the wood chosen and the craftsmanship of individual workers. Both custom and standard furniture compete for processing time on the same equipment by the same craftspeople.

As he reviews the progress of Chads 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 be. Costs associated with the standard line are rising. Dollars are being tied up in inventory, both of raw materials and work in progress. Expensive public warehouse space has to be rented to accommodate the inventory volume. Thomas also is concerned with increased lead times for both custom and standard orders which are causing longer promised delivery times. Capacity is being pushed, and no space if left in the plant for expansion. Thomas begins a careful assessment of the overall impact that the new standard line is having on his manufacturing process.

1. What is the difference between long-term (strategic) and short term (operational) decisions in an organisation? Discuss the types of short-term and long-term decisions which Chad Thomas must make for his company's operations to run effectively? (Discuss at least 2 short term and 2 long-term decisions) - What is the difference between long-term (strategic) and short-term (operational) decisions in an organisation? "- - Scheduling custom-made and standard furniture orders - Capacity planning (Number of employees, number of hours to work per day, overtime) - Level of inventory (raw material, WIP, finished goods), position of keeping inventory - Any capital investment, including type of equipment to invest in to support efficient production - what should be the proper mix of skills and capabilities for the workforce? - How should the facilities be laid out