Production and Operations Management-A1zhang

Objectives
This assessment item relates to course learning outcomes numbers 1 to 3.
Purpose
The primary purpose of this assessment task is to help students develop skills in the use of Production and
Operations Management (POM) principles, theories and models in the analysis of the current operations of a
manufacturing organisation. The assignment requires you to analyse the current situation. The objective is to
identify and specify the problems that exist “ DO NOT TRY TO SOLVE THE CASE.
The secondary purpose of this assignment is to give students the opportunity to enhance their analysis,
critical thinking and written communication skills; particularly in the areas of argument development and
essay writing.
Details
Before starting this assessment read the marking criteria (at the end of this course profile) and Chapters 1,
2, and 3 in the Faculty s Guide for students on website:
http://www.cqu.edu.au/faculties/faculty-of-arts,-business,-informatics-and-education/generalinformation/
guide-for-students
You should also read the Assignment Writing Guidelines on the course website (Moodle).
Read the following short case study and respond to the task requirements at the end of the case within the
context of an academic essay. This assignment should be presented in essay format as per Chapter 3 of the
Faculty Guide for students. You are required to support your argument with appropriate theoretical
discussion and references.
Your essay should be a properly constructed academic essay. It should contain an effective introduction,
body and conclusion. The introduction should introduce the essay and include your argument. The body
should present the evidence you have collected to support your argument, and the conclusion should restate
your argument, summarise the evidence and make a conclusion regarding your argument.
The essay should contain a coherent, but necessarily restricted review of the academic literature on the
Production and Operations Management topics in question. The literature review should be integrated into
the essay, not a separate section. Advice regarding formatting of the essay can be found in Chapters 2, and 3
of the Faculty s Guide for students (2008). Do not use headings or include an abstract. A reference list
formatted in the prescribed Harvard style is compulsory. Do not include a bibliography. Further information
regarding formatting of assignments is available on the course website.
This assessment item involves researching your assigned topic to enhance your understanding of Production
and Operations Management concepts and utilisation of academic literature. Whilst you should AVOID
using only textbooks, the prescribed textbook for the course should be cited in regard to broad operations
management principles. You will be expected to present information and evidence from, and cite, at LEAST
eight (8) relevant peer-reviewed, academic journal articles (minimum requirement). Refer to your
recommended readings for examples of academic journals. While you can cite these articles, you must find
at least eight (8) peer reviewed journal articles not listed in the course materials. The quality and number of
citations will demonstrate the breadth and depth of the literature used to formulate your argument.
AVOID presenting a descriptive account ONLY of your readings. What is required in this assessment is a
critical evaluation of the academic literature as it relates to the specific details of the case study. Your
marker is interested in the conclusions that YOU arrive at from YOUR evaluation of the literature and of
the case study.
Case study: Hudson s Alpine Furniture
Hudson s Alpine Furniture (Hudson s) is a small company that designs and manufactures custom made
timber furniture. The firm was founded in 1998 by Ralph and Della Hudson in Queanbeyan NSW. Their
goal was to combine two of their passions, woodworking and skiing, to create a viable, lucrative
business. The operation was set up to produce high quality custom-made timber furniture for a quite
specific market. This market consisted of the owners of private ski lodges and holiday cabins located
around the snowfields and high country of the New South Wales Alps. Being skiers and lovers of the
high country, Ralph and Della wanted to create furniture that reflected the natural beauty of the area. To
this end, they sourced much of their materials locally, and attempted to maintain an harmonious
relationship between their business and the environment that nurtured it.
Hudson s developed a solid reputation for its creative designs and high-quality workmanship. Sales
eventually encompassed the entire Australian Alps region. Along with this growth came additional
opportunities.
Traditionally, the company had focused entirely on custom-made pieces of furniture, with the customer
specifying the types of wood from which the piece was to be made. As the company s reputation grew
and sales increased however, the small sales department began receiving orders from commercial ski
lodge operators in the region. The orders usually consisted of a number of similar furniture items for use
in the ski lodge concerned. These orders of furniture represented quite a departure from the normal
course of business, and to achieve some economies of scale, the company has tried to process them in
batches.
The commercial buyers of the new product line were much more price sensitive and imposed more
stringent delivery requirements than the private buyers of custom-made furniture. Whilst the new line of
business shows potential for growth and profit, the custom-designed and made furniture continues to
dominate the company s sales, accounting for approximately 60 percent of volume and 75 percent of
revenue.
During the past few months, sales of commercial furniture pieces, whilst still small, have steadily
increased, leading to more regular scheduling of this work. However, when scheduling trade-offs have
to be made, the custom furniture is always given priority because of the higher sales volume and profit
margin. Thus scheduled lots of components for the commercial furniture are often left sitting around the
plant in various stages of completion.
Currently, the company operates a single manufacturing facility in Queanbeyan (close to Canberra),
where both the custom and more standardised commercial furniture pieces are manufactured. The
equipment used for production is mainly general purpose in nature in order to provide the flexibility
needed for producing custom-made pieces of furniture. The layout of the factory groups equipment
together by function. The cutting department houses saws and other cutting equipment, lathes are
grouped in another area and jointing machines have their own section. There are also a number of
assembly stations strategically positioned around the facility. The quality of the finished products
reflects the quality of the wood chosen and the craftsmanship of the individual workers. Both the
custom and the commercial furniture pieces compete for processing time on the same equipment by the
same craftspeople.
Following an informal review of performance of the firm, the Hudsons are pleased to note that the
company has grown. Sales of custom furniture remain strong, and demand for the commercial line is
steadily increasing. However, the company accountant has indicated that profits are not what they
should be. Costs associated with the commercial furniture line are rising. Money is being tied up in
inventory, not just raw materials and work in process, but also increased levels of finished goods
waiting for delivery. Expensive public warehouse space has to be rented to accommodate some of the
inventory volume. The Hudsons are also concerned with increased lead times for both custom and
commercial orders, which are causing longer promised delivery times. Capacity is being pushed, as the
once spacious facility becomes clogged with work in process, and there does not seem to be any space
left in the plant for expansion. The Hudsons decide that the time has come to take a careful look at the
overall impact this new commercial furniture line is having on their operations.
Task
After you have carefully read and analysed the case study, write an essay discussing the operational issues
facing Hudson s Alpine Furniture. The essay should identify and discuss the operational aspects that are
affecting the organisation, paying attention to both strategic and day-to-day implications. Your argument
should address the following four issues with responses integrated within the essay.
1. The current production systems and processes used by Hudson s (a technical analysis).
2. The effect of the new commercial furniture orders on Hudson s operations, including capacity
constraints, operational efficiency and overall effectiveness of the plant (problem definition).
3. The daily operational decisions that the operations manager needs to make under the current
operating conditions to maintain effective production (day-to-day operational issues).
4. The effect the move to producing commercial furniture might have on the company s financial
structure1. (broader organisational issues caused by operational problems).

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