The B case provides information that permits students to quantify the human-factor relationships that may be causing some of the improvement slowdown outlined in the A case (UV3505) and to develop a systems-dynamics simulation model. The C case (UV3507) provides students with additional opportunities to practice the quantification of systems relationships (dominated by soft variables) and to develop a simulation model. See also the D case (UV3508), an abridgment of the A, B, and C cases).
This case presents a firsthand account of a flying experience on Southwest Airlines in June 2004. The narrative reports on the cross-country flying experience of one passenger. See also "Marlene's Marvelous Adventure: JetBlue Airways" (UV0126).
This technical note describes a technique, F(X) Cascade, for determining the potential benefits of implementing a six-sigma improvement project. An integral part of the "define" stage in the DMAIC methodology is quantifying the sources of costs of defects and variability. The F(X) Cascade is one structured approach to this analysis.
For five weeks, Michael "Mac" Ling had been at the Lexington, Virginia, plant of Darden Motor Works (DMW), interviewing production supervisors, quality experts, maintenance supervisors, and repair personnel. He was investigating a puzzling problem: how dirt was infiltrating the paint on trucks assembled at the facility--and how to stop it. Small particles were causing a big, and expensive, problem. Nearly one out of three trucks had to be reworked owing to dirty paint, at a cost of a few dollars to a few hundred dollars per vehicle. The student must develop some hypotheses regarding the causes of the problems.
This story offers students the opportunity to practice systems thinking, including the analysis of behavior over time graphs, the application of systems archetypes, and the design of system interventions.
This case series (see also UVA-OM-1080 through UVA-OM-1082) deals with the transition from a push-based supply chain to an agile pull-based system. In 1999, John Speirs was hired as director of Operations. He brought with him the new agile concept and, with the approval of the U.K. managing director, Stella David, started to create revolution not evolution at Bacardi Southampton by forming an Agile Office. The A case sets up the operations problems and lets the reader follow the implementation story of a new paradigm in operational thinking at Bacardi while hinting at some of the stumbling blocks Southampton would eventually face from its own employees. An argument is presented that leads Southampton to implement the agile-system change program. In addition, data on sales trends and projected financial savings from the agile program are provided. The case ends positively with Southampton wanting to sell the concept to the rest of the Bacardi organization, but it is unclear how. Students should discuss the pros and cons of the agile system, its application to this industry, the timing of the implementation, and methods to communicate the message throughout the supply chain. Financial savings gained from the program are highlighted, and the program's thoroughness should be discussed. An Excel model that simulates financial savings but does not mimic Bacardi's exact thinking is provided in the D case as a learning tool for students. The model allows students to explore the origins of cost savings using a push or a pull system, and it enables students to perform scenario analyses of various business and internal operating conditions.
This case examines the decisions of Seth Goldman and Barry Nalebuff, founders of Honest Tea. Honest Tea is a start-up in the ready-to-drink tea market. Goldman and Nalebuff must craft an expansion and financing strategy.
An individual is considering the development of a new restaurant. To make the decision, she uses NPV analysis to determine whether she should undertake the investment, and, if so, the optimal size of the investment.
The top management team at India's leading home finance company must decide how to deal with the emergence of intense competition at the end of the 1990s. Having founded the industry and dominated it for nearly 20 years, the well-respected company faces a bevy of new entrants from the banking, mortgage finance, and insurance sectors. In particular, management must decide how to respond to an aggressive new competitor who has copied HDFC's processes, lured away some of its key staff, and whose misleading, but lawful, advertising of interest rates is drawing customers away from HDFC.
Describes the evolution of Virgin's dot-com organization and the decision it faced in mid-2000--whether to consolidate several separate dot-com ventures into one larger venture or, instead, to allow each to run independently. Also contains a history of Virgin's development so that students can examine the implications for Virgin's core businesses of moving online.
The president of Wilkerson, faced with declining profits, is struggling to understand why the company is encountering severe price competition on one product line while able to raise prices without competitive response on another product line. The controller proposes that the company develop an activity-based cost model to understand better the different demands that each product line makes on the organization's indirect and support resources. A rewritten version of an earlier case.
Competitive cost analysis, a method for analyzing the cost structure of two competing companies, represents a strategic application of cost modeling. The first note in this three-part series on competitive cost analysis identified the basic conceptual framework and principles for developing accurate and comprehensive cost models with four categories of cost drivers -- design, facility, geography, and execution. The framework coupled with cost-modeling techniques can help the operations analyst/consultant achieve the quantitative rigor required to ensure solid operations decisions at the strategic and tactical level. This note provides a general discussion of four specific tools that will further assist in analyzing cost drivers for competitive analysis. These techniques include teardown analysis, public data sources, scale curve and utilization curve. The final note in this three-part series will provide step-by-step guidance on estimating scale curves and calculating utilization impact.
An understanding of the factors that drive the microeconomics of a business provides the insight needed for strategic and tactical improvements in operational effectiveness. Competitive-cost analysis, a method for analyzing the cost structure of a company, represents a strategic application of cost modeling. The first note in this three-part series (UV3521) identifies the basic framework and principles for developing accurate and comprehensive cost models. The second note (UV3558) discusses specific techniques that will further assist in analyzing cost drivers for competitive analysis. This final note provides detailed guidance on calculating scale curves and utilization effects.
Cushy Armchair, based in Hong Kong, is a leader in the global armchair business, controlling fully autonomous business groups in 17 countries. Cabletronica has recently acquired the company and has sent one of their own senior personnel to restructure operations and integrate the company with another of their furniture divisions outside of the country. Acting as a consultant, the founder of Cushy is approached regarding a communication on a change in policy, but the new head of the company decides to use the parent company's standard method and now must manage with the results change can have on a cross cultural, multinational business.
The company uses the units of activity method to account for its rental inventory. A prominent hedge fund advisor recommends the company's stock be sold short.
On January 6, 1999, Itamar Franco, the governor of the state of Minas Gerais, the second-largest state in Brazil, declared a 90-day moratorium on its debt payment to the federal government. The announcement triggered a run on the Brazilian currency, the Real, and threatened the macroeconomic stability carefully constructed by President Fernando Henrique Cardoso since 1993. Confidence in the country on the part of foreign investors was badly shaken. This case traces the origin of this crisis.
Examines the wrongful death lawsuit brought by the family of an infant who died after a portable crib collapsed. The manufacturer, Kolcraft, licensed the Playskool brand name from the co-defendant, Hasbro Industries. Raises difficult questions about what the two companies should do now, after a series of tragic deaths--and after apparently complying with regulatory requirements governing product recall. Also raises provocative questions about the appropriateness of settlements in wrongful-death suits, corporate responsibility to ensure product safety, and pressures of national media attention on corporate actions. Though the circumstances here are particularly heart-breaking, managers often have to deal with lawsuits that are value-laden and have high emotional content, such as employment discrimination or sexual harassment claims, for example, or environmental and regulatory disputes. The kinds of decisions and tensions that a manager faces in such instances surely have much in common with the issues raised.