Operations Management at Travel Luggage Company

The Travel Luggage Company LugPro designs and manufactures several different styles of soft- and hardcover luggage, briefcases, hanging bags, and purses. Their best-selling item is a line of hardcover luggage called the Trotter. It is produced in a basic five-stage assembly process that can accommodate several different outer coverings and colors. The assembly process includes constructing a heavy-duty plastic and metal frame; attaching the outer covering; joining the top and bottom and attaching the hinge mechanism; attaching the latches, lock, and handle; and doing the finishing work, including the luggage lining. Several hundred new pieces of luggage of particular shape and color are initiated through the assembly process each week in the companys two factories. Travel Luggage Company also runs its own logistics operations to serve their customers in their 200 outlets all around Middle East.

1- Answer shortly the following questions:

a) Name three main functions, which are found in every organization, in Travel Luggage Company.

b) What constitutes operations in Travel Luggage Company? Name at least three activities?

c) Describe the inputs and outputs of Travel Luggage Companys manufacturing operations.

d) Name and explain at least three differences between Travel Luggage Companys operations and a banks operations?

2- The Travel Luggage Company has production facilities in two locations. Average monthly cost data and output levels are as follows.

	Dubai	Abu Dhabi
Finished Goods	120000	150000
Work In Process	5000	8000
Labor Cost	30000	38000
Material Cost	25000	30000
Energy Cost	1000	1500
Logistics Cost	3000	4000
Rent Cost	1000	1500

a. Which factory has the highest labor single factor productivity?

b. Which factory has the highest total factor productivity?

c. Which factory has the highest multifactor productivity measure for finished goods to labor and material?

3- Travel Luggage Company wants to add a new line of luggage that targets business travelers to their product portfolio.

a) List the major stages of the design process and explain two of these stages shortly.

b) Explain what the functional design would include.

4- Travel Luggage Company tries to decide which type of production process to use for the new line of luggage. They consider using batch production or mass production. Compare these two types of processes and discuss their advantage and disadvantages.

5- Travel Luggage Company is trying to determine how best to produce its newest product. The new luggage line could be produced in-house using either batch production or mass production. Cost data are given below.

	Fixed Cost	Variable Cost	Selling Price
Batch Production	$100,000	$80	$150
Mass Production	$400,000	$20	$150

a) Compute the break-even point for each process.

b) Compute the point of indifference between batch and mass production.

c) How the company should schedule these processes?