The Internet has drastically changed the way in which customers interact with businesses. Although the customer interface has changed, operations management remains a crucial element in the success of Internet retailing.
The retail sale of books is an industry with a long history. In the recent past, bookstores have followed a typical path of retail consolidation. The traditional neighborhood bookstore flourished for many years but was challenged by small chains. Then, both of these types retailers were overcome by the large big box chains such as Borders and Barnes and Nobles with thousands of stores across the USA. Now, the big box chains are faced with competition from Internet bookstores such as Amazon.com.
In the following questions, compare and contrast the operations infrastructures needed to support a “brick” traditional thousands of store chain such as Barnes and Nobles (excluding the internet component) and a “click” internet only (such as Amazon.com but only books) in the bookstore industry.
There is no need to find out specific information about companies, but discuss your expectations of the differences between these types of bookstore operations. Please state your general assumptions about each business. Please be sure to address operations issues in your answers.
1.a Compare and contrast a “bricks” non-internet national store book business and a “clicks” internet only bookstore on the following operations dimensions: Order winners, type of inventory (cycle, safety stock, anticipation, pipeline), and supply chain design.
1.b Discuss the similarities and difference in the components that determine capacity for both “bricks” and “clicks”? What type of capacity utilization would you anticipate for each?
1.c A retiring professor wants to open a local, one location bookstore. How can this “retired professor’s bookstore” compete with the new “clicks” model? What competitive capabilities or order winners will need to be developed? How will “retired professor bookstore” compare with the “clicks” model in terms of supply chain and inventory?
Pikes Pizza is a new local lunch time pizza parlor with one store location. Pizza making is a multiple step process. The first two steps, mixing the dough and making the sauce, can be done simultaneously during off peak times. Sauce and balls of dough can be refrigerated and stored. These activities are not included in the problem.
During the lunch rush, there are three main steps to pizza making: assembly, baking, and boxing. Once an order is placed, the chef begins the assembly of the pizza. The chef takes the ball of dough and tosses the ball of dough into the round pizza crust. The chef spreads the sauce on the crust then adds the required toppings. The other friend completes the remaining steps of baking and boxing. The assembled pizza is placed in the oven and baked. The pizza is taken out of the oven, cut and placed in a box for pick up. Customers pay for the pizza at the time of pick up.
Pizzas come in three sizes. The oven can hold multiple pizzas at a time, but it is dependent on the size of the pizza. Pizzas can enter and exit the oven at any time as long as the number does not exceed the maximum. The following chart shows the time, material costs, price, and oven capacity for each pizza size.
|For 1 Pizza||Small||Medium||Large|
|Tossing crust||2.5 minutes||3 minutes||4 minutes|
|Sauce and topping||1.5 minutes||2 minutes||3 minutes|
|Place in oven and baked||12 minutes||15 minutes||20 minutes|
|Cutting/ paying||1 minute||1 minutes||1 minute|
|Max pizzas in Oven at one time||5||5||4|
2.a Assuming that only large pizzas are sold at lunch, what is the maximum capacity of this system during the 2 hour lunch period? What part of the operation is the bottleneck? Please list any assumptions and discuss how you arrived at your conclusion.
2.b Pikes Pizza is considering running a special on small pizzas for lunch. The small pizza promotion would lower the price to $6 for a small pizza. Assuming that Pikes Pizza is operating at capacity at lunch and everyone will buy small pizzas, should Pikes Pizza offer a special lunch price small pizza?
2.c What are the challenges for scheduling the pizza operations? Why would you use a capacity cushion? What size capacity cushion would be appropriate for this pizza operation?
Using the Bill of Material (BOM) and MRP explosion tables, please answer the following questions. Assume the charts are correct. Please explain your answers in detail.
3.a As the materials planner, what should you be doing today in week 1?
3.b As the materials planner, what should you plan to do in week 5?
3.c Which products are manufactured in this plant? What is planned to be manufactured in the plant in week 6?
3.d An MRP record show the time phased nature of planning. What types of processes should use MRP as part of the planning process? How could MRP be used in services?
Bill of Material
|Part No: B
|Lot Size: L4L||Units|
|Lead Time: 2||Weeks|
|Planned order receipts||10||25||0||25||30||15||0||50|
|Available balance | 40||0||10||0||0||0||0||0||0||0||0|
|Planned order releases||10||25||0||25||30||15||0||50|
|Part No: C
|Lot Size: L4L||Units|
|Lead Time: 1||Weeks|
|Planned order receipts||90||40||100||60||80||60||130||0||100|
|Available balance | 80||40||0||0||0||0||0||0||0||0||0|
|Planned order releases||90||40||100||60||80||60||130||0||100||0|
|Part No: D
|Lot Size: L4L||Units|
|Lead Time: 3||Weeks|
|Planned order receipts||20||30||15||0||50|
|Available balance | 20||10||5||5||0||0||0||0|
|Planned order releases||20||30||15||0||50|