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.