Scenario 6 Operations Management

Ch 29-35, 13-Q2, 34
1. TheZone is in the process of introducing the TZAdvantage, a new tennis racquet that
incorporates nanotechnology into the production process. The TZAdvantage tennis racquet is
constructed using a unique combination of carbon, graphite, and Kevlar fibres. The Kevlar
fibres are modified at the molecular level to give them tiny barbed fingers that help the
fibres bond with each other during the manufacturing process, resulting in a racquet that is
much stronger and more stable than any model the company has previously offered. The
TZAdvantage is being manufactured in two models: TZAdvantage Model I is designed for
beginning and intermediate players, and TZAdvantage Model II is designed for advanced
players.

Beth Mallory is an operations manager working on the product development team. Beths
job is to analyse a variety of situations associated with the TZAdvantage product launch,
including production planning and distribution of the new racquets to the companys
distribution centres. One immediate task is to determine how to best spend TheZones
budget of $10,000 for special tournament versions of the TZAdavantage racquets. The
tournament racquets are part of a promotion for a pro-am tennis tournament that the
TheZone is sponsoring next month. TheZone will be giving the racquets to key guests and
players in the tournament. TZ will continue to manufacture its regular production of
TZAdvatage racquets to meet the delivery schedule already scheduled for the following
month. TheZone must accomplish the production of tournament racquets without setting
back the scheduled production of the regular racquets. Beth also must develop distribution
centres to supply advance orders from retailers. After finishing her work with the production
of the TZAdvantage racquets, Beth is also responsible for awarding three transportation
contracts to various shipping companies that will distribute the racquets and other TZ
products to retailers.

Level 1
2. The Model II racquet costs $28.00 per racquet to produce, and the Model I racquet, which
is much simpler to produce, costs $18.00 per racquet to produce. The costs include labour
and material costs as well as an allocation of the overhead costs at the plant that produce
the racquets. Although Beth must consider other factors when planning the production of
racquets, for the preliminary analysis, Beth will allocate resources to produce the racquets.
After conducting her preliminary analysis on how to best allocate the resources to produce
the maximum number of racquets, Beth will further refine her calculations to ensure that
there are enough raw materials in inventory to produce the racquets.

3. The marketing group has allocated $10,000 to produce the tournament versions of both
racquets and wants to give away at least 150 racquets of each model, for a total of at least
300 racquets. The plants one-time setup cost for each racquet appears in the Production
Setup Cost column in Beths worksheet. The setup costs includes costs associated with
setting up the machinery to produce the racquets, such as changing out fixtures , obtaining
new inventory supplies, and moving out the inventory associated with the previous
production run.
 4. After viewing Beths worksheet, Nick Staples, the product manager for TZAdvantage, wants
to ensure that at least 300 racquets are available for the promotion, with at least 150 Model
I and Model II racquets each. Nick and Beth also discuss the limited inventory of some of the
fibres used in the manufacturing process. Nick asks Beth to verify that there are enough raw
materials in stock to produce the tournament racquets. However he doesnt want the
regular production schedule to slip because of the promotion. Beth checks the stocks of
raw fibre inventories to ensure that sufficient inventories of carbon, graphite, and Kevlar
fibres are available to produce the tournament racquets.

5. Beth just received an update from the plants inventory manager. He was able to locate
another 90 ounces Kevlar fibres and another 50 ounces of graphite fibres that can be used
without disrupting the regular production run.

Level 2

6. Now that Beth has determined the best use of inventory and resources for producing the
tournament racquets for the Pro-Am promotion, she turns her attention to determining how
this special order of racquets will fit into the production schedule at the plants that will
manufacture the racquets.

There are three plants, located in Seattle, Indianapolis, and Boston, that will produce the
regular racquets in the normal production run. After talking with the Indianapolis plant
manager, Bob Jensen, Beth learns that the Indianapolis plant can schedule production time
this month to produce the tournament racquets. Producing each request requires two
production steps a moulding operation and a finishing operation. Each racquet requires a
specific amount of moulding time to cast the outer frame of the racquet, and a specific
amount of finishing time to apply the grip and to string the racquet. For the TZAdvantage
Model I racquet, the moulding time is 12 minutes (0.20 hours) per racquet, and finishing
time is also 12 minutes (0.20 hours) per racquet. For TZAdvantage Model II racquet, the
moulding time is 12 minutes (0.20 hours), and the finishing time is 30 minutes (0.50 hours).
However, Bob can only schedule 70 hours of moulding time and 100 hours of finishing time
for production of the tournament racquets. Beth needs to change her production plan to
include the additional constraints, the available moulding and finishing times, to determine
the production quantity for both racquets, maximizing the number of racquets produced
while staying within the established time limits as well as inventory and budget constraints.

7. Beth discussed the results of her analysis with both Nick and the plant manager. The plant
manager was not able to allocate any more finishing time to the production of the
tournament racquets without affecting the production of the regular racquets, so
increasing the production time in the plant is not an option. However, Nick was willing to
change the constraint of producing 150 racquets for each model. He asks Beth to produce
at least 100 of the Model II racquets and use the remainder of the resources to produce as
many Model I racquets as possible.