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Production and Operations Management

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Expedite the roofing. Do nothing until December 1st. ... Expedite the roofing ($9,000) (activity K from 8 to 2 weeks) (Tcp = 48 x) ... – PowerPoint PPT presentation

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Title: Production and Operations Management


1
Production and Operations Management
  • The Sharon Construction Corporation Case

2
TEAM 07
  • Christina Danver
  • Ben Gumpert
  • Adan Montoya
  • Gurinder Virdi

3
Problem
  • Overhead cost of 500 per week for any delay
    after 48 weeks
  • Penalty of 15,000 per week if project takes more
    than 52 weeks
  • Possible Labor Strike (12/01/04)
  • Possible Cold December

4
Alternatives
  1. Expedite seat gallery supports
  2. Expedite seat gallery supports and filling of the
    field
  3. Expedite the roofing
  4. Do nothing until December 1st. If the cold is
    indeed extreme, postpone concrete pouring or heat
    when necessary if a strike occurs, expedite all
    activities after resolution
  5. Do nothing

5
Analysis of Baseline A5
  • Do nothing (Tcp 48x weeks)

6
Analysis of A1
  • Expedite pouring concrete for seat gallery
    supports (20,000) (activity G from 12 to 6
    weeks) (Tcp42x)

7
Analysis of A2
  • Expedite pouring concrete for seat gallery
    supports (20,000) (G from 12 to 6 weeks) and
    filling of the field (10,000) (C from 14 to 9
    weeks) (Tcp 42x)

8
Analysis of A3
  • Expedite the roofing (9,000) (activity K from 8
    to 2 weeks) (Tcp 48x)

9
Analysis of A4 with 8w strike
  • Do nothing until December 1st. If the cold is
    indeed extreme, postpone concrete pouring or heat
    when necessary if a strike occurs, expedite all
    activities after resolution (3,000 per week cut)
    (Tcp 52)

10
Analysis of A4 with 12w strike
  • Do nothing until December 1st. If the cold is
    indeed extreme, postpone concrete pouring or heat
    when necessary if a strike occurs, expedite all
    activities after resolution (3,000 per week cut)
    (Tcp 56)

11
Time analysis
12
Cost analysis
13
Risk Analysis
14
Risk Analysis
15
Risk Profiles
16
Risk Profiles
17
Recommendation
  1. A4 Do nothing until December 1st. If the cold
    is indeed extreme, postpone concrete pouring if
    a strike occurs, expedite all activities after
    resolution (lowest E(x))
  2. A1 Expedite seat gallery supports (second lowest
    E(x))

18
Conclusion
  • A1 is better than A2 and A3 if the
    probability/risk of a strike is considered.
  • A4 provides the option of speeding up the
    remaining tasks in case of a strike and doing
    nothing otherwise. This option is powerful.
  • A4 has a lower E(x), but a higher uncertainty
    SD(x) (broad range of losses from 0 to 76,000)
    than A1. The analysis of the risk profiles will
    help management to select the alternative which
    fits the corporations risk strategy.
  • If the corporation is adverse to risk, it could
    select A1 (losses are spread out from 20,000 to
    53,000). A1 has a lower uncertainty (SD(x)) than
    A4.
  • The project duration could be a factor for the
    decision, if there are projects on hold due to
    lack of resources.
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