OPERATIONS TASKS

OUTLOOK GROUP
TASK 1
TASK 1
 TASK 2
Planning at Orissa for
Gateways
Demand Per Day
Month Expected Demand Production Days (computed)
Jan 900 22 41
Feb 700 18 39
Mar 800 21 38
Apr 1,200 21 57
May 1,500 22 68
June 1,100 20 55
Cost Information
Inventory carrying cost 5 per unit per month
Subcontracting cost per unit 10 per unit
Average pay rate 5 per hour (40 per day)
7 per hour
Overtime pay rate
(above 8 hours per day)
Labor-hours to produce a unit 1.6 hours per unit
Cost of increasing daily production rate (hiring and 300 per unit
training)
600 per unit
Cost of decreasing daily production rate (layoffs)
 TASK 2
⚫ Implement a effective Aggregate Planning
Process using Chase Strategy, Level
Strategy and Mixed Strategy.
⚫ Find out which one is better and why
statistically.
TASK 3
 TASK 4
⚫ Outlook Gateways has a demand of 75
Lakhs per year. Setup cost and holding cost
are 29 and 35 per unit. Number of pieces in
a order includes 2.3 Lakhs per order.
Printing is done 300 days and 2 days to
deliver this magazine.
⚫ What can be the EOQ of this? With above
data find the Setup Cost and Holding cost
for a year. What is the Reorder Point.
⚫ What is the annual demand to production
ratio in this case. What does it indicate for
HINTS
 Inventory Usage Over Time
Usage rate Average
Order quantity inventory
=Q on hand
Inventory

(maximum
inventory Q
level

level) 2
Minimum
inventory

Time
Figure 12.3
Minimizing Costs
Objective is to minimize total costs
Curve for total
cost of holding
and setup
Minimum
total cost
Annual

Holding cost
cost

curve

Setup (or order)

cost curve
Optimal Order quantity
Table 11.5
order
Aggregate Planning
Marke Prod Resea
tplace uct rch
and decis
Process
ions and
dema planni
Dem
nd techn
and ng and ology
capacit Wor Raw
forec Aggre
asts, y kforc mate
gate rials Inve
order decisio
plan e ntor
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avail
s Master
for capacity y
able
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tion
ction ractors) han
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Detail
le and Figure 13.2
ed
MRP
Aggregate Planning Strategies
1. Use inventories to absorb changes in
demand
2. Accommodate changes by varying workforce
size
3. Use part-timers, overtime, or idle time to
absorb changes
4. Use subcontractors and maintain a stable
workforce
Mixing Options to
Develop a Plan
Chase strategy
Match output rates to demand forecast
for each period
Vary workforce levels or vary production
rate
Favored by many service organizations
Mixing Options to
Develop a Plan
Level strategy
Daily production is uniform
Use inventory or idle time as buffer
Stable production leads to better quality
and productivity
Some combination of capacity
options, a mixed strategy, might be
OUTLOOK`S .

OPERATIONS
STRATEGY
 Introduction
⚫ Outlook`s Success = amalgation of strategic
moves, sophisticated marketing,
responsive operation & innovative R&D
simply put it as a market leader
Operations Decisions by
Outlook
⚫ Control over Intellectual Property –
Creative design and content making takes
place in editorial offices and is managed
in-house.
⚫ Control over Consumer Insights – Market
research is performed in-house.
⚫ Strategic Investments in Suppliers –
Outlook strategically invests capital with
suppliers in order to reserve and assure
Operations Decisions by
Outlook
⚫ Rigid Planning Process Variability in
product demand for the magazine is
inherent. Outlook carefully manages is
supply chain resources to match demand
with supply. Production capacity is flexible
to meet surges in demand.
⚫ A Focus on High-Valued-Added Work –
The research and analysis by Outlook is
the best in the market.
 Advantages of Outlook`s
Operation Strategy
⚫ Innovation is the key. Sales spikes with
season.
⚫ Limited investment on fixed cost.
⚫ Asset light and working capital light.
⚫ Supplier`s finance goods.
Corporate Strategy
⚫ Focus: Innovation, NPD and brand
management.
⚫ Frequent introduction of new magazines
and features on existing magazines
⚫ Product breadth
⚫ High quality and reliable products
⚫ Customers loyal to the brand
Retail Strategy
⚫ Multiple channels: authorized, dealers,
online, vendors
⚫ Retail stores:
⚫ Highly uncertain demand
⚫ Supplier code of conduct
Supply Strategy
⚫ Dominant buyer – purchases most or all of
supplier capacity to shut out competition
⚫ Makes investments in suppliers to assure
they use the latest technology
⚫ Builds flexibility into the supply chain to
respond to surges in demand
Distribution Strategy
⚫ Outsourced
⚫ Purchases capacity in advance
⚫ Uses (expensive) airfreight to speed
 Understanding the Supply Chain
Owne
⚫ . Outso d Mumbai
Paper and pulp urced Mumbai Trans Airport
S Sh
industry transp Print Hub portat h ipp
S ed
ortatio ion i h
p
n p i
e p Asian
d p Countries
Different e
Fastest
States d
Courier
Service
Other Non
Customers Countries
The 4V Analysis
 Approach
⚫ .
Top Down
This is done
to increase Market
Operations consumer Requirement
Requirements experience. One stop
solutions for
Innovation
information.
Responsive Bottom Up Unbiased view
supply chain Economic point. On time
offers, delivery
Digital
subscription
Issues with Outlook`s Strategy
⚫ No unified loyalty scheme policy.
⚫ Frequent stock outs ( Retail outlets)
⚫ All stores don`t provide the same
experience.
⚫ Few moves which can`t be interpreted :
Removal of offers.
Suggested Solution
⚫ Loyalty scheme should be removed
⚫ Constant offers for defined periods.
⚫ Adequate safety inventory.
 Scope for Future
⚫ Logistics
⚫ Security system
THANK YOU