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ABC Hardware Store is a very small hardware store in a small town….
ABC Hardware Store is a very small hardware store in a small town. It has just gotten a new manager, and she has called you in to observe the operations of the store and propose ways to increase profits and efficiencies.
The hardware store has “all the basics” in terms of supplies, but their niche is that they have the best Items A, B, and C in the state. People come from all over to get them, and much of the company’s reputation is because of these items.
As you enter the store, you see three checkout areas, and Margie, the cashier, has seven people in line, and the customers at the end of the line are not happy. You witness the last person in line returning their item to the shelf and leaving without purchasing an item. Throughout the day, you notice that Margie’s line usually has between 5 and 7 people in it, and she is working as fast as she can. On average, a new person gets in line every 3 minutes, and it takes 4 minutes to serve the customer. When the line gets “bad enough,” the floor employees Zac and Fran will come up and man the other registers until the line goes down. They return to the floor when the line is more manageable.
As you continue to roam the store, you arrive at the station that creates items A, B, and C. There are machines that can make each item, and there are 3 machines in all. You learn the following about who is trained to operate the machines, what they can make, how long it takes to make a single item, and the number of hours each employee works each week.
Operator Item A Item B Item C Hours/week at the machine Hourly salary
Brett 1 hour to make 30 minutes to make 45 minutes to make 20 $17.50
Myra 45 minutes to make 90 minutes to make 45 minutes to make 15 $18.00
Candice 30 minutes to make 45 minutes to make 1 hour to make 15 $15
You also learn the cost it takes to make each item, the item’s dimensions, and the selling price of each.
Item A Item B Item C
Cost to make/unit $34 $36 $23
Space it takes up when boxed 3 feet x 4 feet x 1 foot 2 feet x 2 feet x 2 feet 4 feet x 2 feet x 2 feet
Average demand per week 15 10 30
Selling Price $220 $300 $185.00
You enter a small warehouse/receiving area in the back of the store. It has about 500 square feet of space, half of which is taken up by surplus item Bs and other non-perishable items. There are probably about 25 extra Item Bs. Then, about 100 square feet is taken up by stacks of Parts 1-5 which are needed to build Items A, B, and C. Ben, the warehouse manager of the store is ordering based on the JIT system to keep the parts for Items A, B, and C coming. Yesterday’s order consisted of 6 Part 1s, 3 Part 2s, 7 part 3s, 1 Part 4, and 1 Part 5.
Item A needs Item B needs Item C needs Cost for 1 Cost for 10 Size in Feet
Part 1 2 3 0 $10 $80 1x1x1
Part 2 1 0 3 $5 $40 1x1x1
Part 3 0 2 2 $3 $20 1x1x1
Part 4 1 0 0 $8 $70 1x1x1
Part 5 0 0 1 $2 $20 1x1x1
Brett, Myra, and Candice are not “fans” of Ben because they keep running out of the parts they need, and other times, they have way too much stacked up around them. When you asked Ben how he handles ordering, he said that he uses the same numbers as last year on the same date.
The floor personnel you meet that are assisting customers are Zac and Fran. They are there to answer questions and help customers find items. They also run up to the cashier station when Margie is overwhelmed and carry items A, B, and C out to the customers’ vehicles.
The task:
Summarize the problem and provide evidence that it exists
Propose a solution to three problems, making sure to explicitly explain how it directly ties to course content.
Provide evidence of why your proposed solution will work. This includes mathematical calculations. Remember, the class is Quantitative Analysis, so there should be numbers discussed throughout.
