# Production and Operations Management

## Presentation on theme: "Production and Operations Management"— Presentation transcript:

Production and Operations Management
The Sharon Construction Corporation Case

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

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

Alternatives Expedite seat gallery supports
Expedite seat gallery supports and filling of the field Expedite the roofing 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 Do nothing

Analysis of Baseline & A5
Do nothing (Tcp = 48+x weeks)

Analysis of A1 Expedite pouring concrete for seat gallery supports (\$20,000) (activity G from 12 to 6 weeks) (Tcp=42+x)

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 = 42+x)

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

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)

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)

Time analysis

Cost analysis

Risk Analysis

Risk Analysis

Risk Profiles

Risk Profiles

Recommendation 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)) A1: Expedite seat gallery supports (second lowest E(x))

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 corporation’s 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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