Linear Programming CUSTOM CABINETS, INC.Custom Cabinets, Inc. case study

   

Custom Cabinets, Inc. (CC), manufactures two major lines of kitchen profit numbers. You don't have any preconceived and bathroom cabinets. The SemiCustom Line consists of cabinets that ideas about what will and will not work, so l expect you to come up with ideas that are more innovative than the old hands. 1 spent most of the morning with the other department heads are variations on a standard design. These cabinets are made to order The StandardLine is a lower-priced line of catinets that use standard- ized designs and materials. StandardLine cabinets are made to stock gathering information that I think you might need (that information is The company has been in business for many years and has consistently enclosed with this case). If you need additional information send me an performed well financially. It was obvious that something big was up as the management stalf began to gather for a meeting called by CCI General Marager ohn Fiem- ing. There was litle of the usual light banter, and more significantly. there computer resources should you need them. were no coffee and donuts. The CCl cuture celebrates even small achieve- ments with coffee and donuts. Their absence was not a good omen. e-mail or stop in my office. IfI can get the information you need, I will do so. We're counting on you. Don't let us down. II let you guys figure out when and where to meet. Needless to say you have full access to all our "There are a few things you need to keep in mind. Our SemiCustom Line is hot because of our excellent customer service. We never fail to deliver a SemiCustom unit on time. We also need to meet our customer John began rather somberly. "As you know we are almost two months into our second fiscal quarter. Frankly, the financial resuts don't look very good. You are aware, I'm sure, of how the stock market has been punishing companies that fail to at least meet their sales and profit targets. We are in danger of having to announce that we met our sales goals but fell short of our profit goals. This will be a real jolt to our shareholders, and since, except for the interns, we are all in the company's stock purchase plan, that means it will hurt us, too. We only have one month to turn this around. We don't want to take any shortcut approaches to meeting our goals-we want the results to reflect the square toot. There is no reasonable prospect of obtaining more of the real results of our operation. orders on the Standardline units, but we can cut the stockage levels if necessary. We can't, however, exceed the stockage levels. Making excess inventory is no way to be more efficient. If necessary, we could work 10 percent overtime in assembly and 5 percent overtime in fin- ishing. Each overtime hour will add $5.00 per hour to our labor cost. Ive checked with all our suppliers. We can get up to 50,000 additional board-feet of wood by paying a $0.50 per board-foot upcharge and 10,000 additional square feet of laminate for an upcharge of $0.15 per other materials at any price. Because of the way our profit center is set The headquarters brass talked with a consultant who analyzed up, we get credit for building to the authorized stockage level as if it our records. Her opinion is that we need to address operations effi- ciency. In her words, we have to learn to get more out of our existing resources. She leaves the details to us to figure out. Our biggest per- sonnel resource to assign to this problem is our group of management Scheduler and has worked for Custom Cabinets for a long time. You interns from Nearby University. I've taliked to the intems and alerted have been told that she knows everything about how things work here them that for the next month or so they are to work directly with Bill and is a good person to know. "I heard about your assignment," she Chavez, our Operations Manager, on this project. The goal is to be sure that we get the maximum bang for our resource buck during the next month's operations. We have to get the most profit possible to make the were a final sale." As you were leaving the meeting. Barbara Wilson invited you to the break room for a cup of coffee. Barbara is the Lead Production began. "Let me tel you some things about your boss, Bill Chavez. He isa great guy to work for and he really knows his stuft. He is not one of the college guys who act as if they know everything-no offense. quarter's results look at least respectable. Neediess to say, I wrant each He worked his way up. He is very intelligent, but doesn't have the of you to give the intern group your fullest cooperation." Now you understand why the interns were invited to the staff meet- ing. You've just been on board for a few weeks and have just begun to everything in the report to be written in words he can understand. He understand the company's operations. That means the boss can't be likes you to include computer printouts in an appendix to the report looking to you for engineering solutions. Your expertise is aperations (he likes to see all the backup detail), but wants you to explain in the management, not engineering. As the meeting broke up, Bill Chavez asked you the interns) to stay doesn't understand what you are recommending and why, he won't for a follow-up meeting with him. Tve been very impressed with the work that you have done in your short time with CCI. You obviously get assignment you will ever do for him. I figured that the least I could do an excellent education at Nearby U. I asked Tom to assign you to me because I think you are our best hope of pulling out some really good good start on this project." educational background that you do. In the past, new college gradu- ates have made some mistakes in writing reports for Bill. He likes for body of the report why they are necessary and what they mean. It he ask questions. He will just discard the report, and that will be the last would be to buy you a cup of coffee and try to help you get off to a (continund)