Operation Management Report

OM Project–Anand Marble Group A12

Unit of measure | (per sq ft) | | |

SKUs in marble | Purchase | Additional cost | Sale price | Monthly sale(sq ft) |

Black Granite | 100 | 20 | 150 | 4000 |

Dungri | 60 | 20 | 90 | 6000 |

Morwar | 45 | 20 | 75 | 9000 |

Torinto | 45 | 15 | 70 | 7500 |

Pink | 36 | 15 | 65 | 10000 |

Green | 36 | 15 | 65 | 7500 |

We have decided to work on some primary data collected from Anand Marble in Kolkata.

The above data shows the average monthly sales of varieties of marble they offer along with the cost per unit and the transportation cost is considered to be the ordering cost here which is Rs 40000 per lot of 6000 sq ft of marble. The warehouse that they use has a capacity of 20000 sq ft. of marble.

We can use the above data to apply the EOQ model of Operations Management to find out the optimum order qty of various marble types which would minimize the inventory related cost for them. The holding cost being the additional cost as mentioned above in per sq ft per month unit. The ordering cost being Rs 40000 also has a constraint of 6000 sq ft per unit. Another constraint is the maximum storage capacity of 20000 sq ft of marble.

We would also like to carry out a constraint management exercise in this company. After the marble is purchased there are a series of steps to be followed. The processes include unloading, arranging in lots, talking to customers, loading and delivering the marbles. We would analyze each of these processes and try to find out the bottleneck or the constraint and try to maximize the profits through trying to optimize the bottleneck. For this we plan to collect primary data from Anand Marble about the required time in minutes per unit for each of these processes. In this way we would like to make the processes efficient and the inventory holding minimum.

Nature of problem – To minimize of inventory costs involving a good variety of SKU with constraints such as storage capacity and...