EM701 Managing with Analytical Methods Case Study

PART A Looking out the window of her SUV, Elle, was paying particular attention to what people were wearing in this hot July summer day. Elle is the owner and manager of Xarah, Inc. a trendy women's fashion and apparel company. She always makes a point of writing down her thoughts when something catches her eye. It is never too early to think of next summer's line and she is thinking turquoise! But then she checks her watch and tells herself she needs to focus on the fall line. She hopes to make it on time for her meeting with the production manager, Cesar. They need to decide on next month's production plan. Accurate planning for the August production is critical since the items produced will hit the stores in September, and women generally, buy a majority of the fall fashions when they first appear then. She walks into her office and looks at her desk. Papers, clothing patterns designed almost six months ago, lists of material requirements, estimated demand forecasts, and customer surveys taken at the fashion shows remind her of the hectic days of designing the fall line, then presenting it at fashion shows in New York, Milan, and Paris. In the end, she paid her team of six designers a total of $860,000 for their work on her fall line. With the cost of hiring runway models, hair stylists, and make-up artists; sewing and fitting clothes; building the set; choreographing and rehearsing the show; and renting the venue, the three fashion shows cost her an additional $2,700,000. She studies the clothing patterns and material requirements. Her fall line consists of both professional and casual fashions. She determined the price for each clothing item by taking into account the quality and cost of material, the cost of labor and manufacturing, the demand for the item, and the prestige of the brand name. The fall professional fashion includes- Clothing Item Material Requirements Price Labor and Machine Cost Tailored wool slacks 3 yards of wool 2 yards of acetate lining $300 $160 Cashmere sweater 1.5 yards of cashmere 450 150 Silk blouse 1.5 yards of silk 180 100 Silk camisole 0.5 yard of silk 120 60 Tailored skirt 2 yards of rayon 1.5 yards of acetate lining 270 120 Wood blazer 2.5 yards of wool 1.5 yards of acetate lining 320 140 The fall casual fashion includesEM701 Managing with Analytical Methods Case Study _____________________________________________________________________________________ Clothing Item Material Requirements Price Labor and Machine Cost Velvet pants 3 yards of velvet 2 yards of acetate lining $350 $175 Cotton sweater 1.5 yards of cotton 130 60 Cotton miniskirt 0.5 yard of cotton 75 40 Velvet shirt 1.5 yards of velvet 200 160 Button-down blouse 1.5 yards of rayon 120 90 She knows that for the next month, she has ordered 45,000 yards of wool, 28,000 yards of acetate, 9,000 yards of cashmere, 18,000 yards of silk, 30,000 yards of rayon, 20,000 yards of velvet, and 30,000 yards of cotton for production. The prices of the materials are listed below- Material Price per Yard Wool $9 Acetate 1.50 Cashmere 60 Silk 13 Rayon 2.25 Velvet 12 Cotton 2.5 She knows that the production of both the silk blouse and cotton sweater leaves leftover scraps of material. Specifically, for the production of one silk blouse or one cotton sweater, 2 yards of silk and cotton, respectively, are needed. From these 2 yards, 1.5 yards are used for the silk blouse or the cotton sweater and 0.5 yard is left as scrap material. She does not want to waste the material, so she plans to use the rectangular scrap of silk or cotton to produce a silk camisole or cotton miniskirt, respectively. Therefore, whenever a silk blouse is produced, a silk camisole is also produced. Likewise, whenever a cotton sweater is produced, a cotton miniskirt is also produced. Note that it is possible to produce a silk camisole without producing a silk blouse and a cotton miniskirt without producing a cotton sweater. The demand forecasts indicate that some items have limited demand. Specifically, because the velvet pants and velvet shirts are fashion fads, she has forecasted that it can sell only 5,500 pairs of velvet pants and 6,000 velvet shirts. The cashmere sweater also has limited demand because it is quite expensive, and Elle knows it can sell at most 4,000 cashmere sweaters. The silk blouses and camisoles have limited demand because many women think silk is too hard to care for, and projects that it can sell at most 12,000 silk blouses and 15,000 silk camisoles. The demand forecasts also indicate that the wool slacks, tailored skirts, and wool blazers have a great demand because they are basic items needed in every professional wardrobe. Specifically, the demand is 7,000 pairs of wool slacks and 5,000 wool blazers. Elle wants to meet at least 60 EM701 Managing with Analytical Methods Case Study _____________________________________________________________________________________ percent of the demand for these two items to maintain her loyal customer base. Although the demand for tailored skirts could not be estimated, Elle feels she should make at least 2,800 of them.

(b) Determine the optimal production plan. How many items of each product should be produced? Elle would like to see the details of developing the optimal solution. Include any Excel or QM files in your submission.