ITEC 355 Opertion Managment Spring 2019 – Team Challenge #1
●This is a team assignment and should be completed with your course project team.
●Collaboration across teams is prohibited. Please revisit the American University’s Integrity Code before completing this assignment.
●Each teammust upload one file, in pdf format,to Blackboard.
●Your answer reportshould include detailed answers to *all*the questions. Make sure all figures, tables, and graphs are included in your report. Each Figure and Table should have a number and a heading, e.g.,” Table 1. Average Working Hours.” All your work – quantitative work, in particular – must be explained clearly.
GRADING CRITERIA:
Your answer report will be graded on the quality of your answers as well as the clarity and format. Here is a breakdown of grades (out of 100 points):
●(92 points) quality and correctness of your answers,
●(5 point) presentation, clarity, and format of your report and your answers,
●(3 points) following the submission guidelines.
●A late submission costs you 20% of your grade per day. For example, if you submit your work a day after the due date (24 hours), the maximum score you will earn is 80/100.
Question – 1. (9 points) AUmazon, an online retailer, started using robots in its fulfillment centers. The first generation of robots, e.g., Kiva robots, enabled faster processing of orders in its warehouse. The products stored in the fulfillment center are placed on special shelves. When a customer places an order, a Kiva robot carries the shelf with the ordered products to the packing area. A human employee picks the item from the shelf and packs it to fulfill the order. AUmazon is piloting a new technology that will replace the human employees by picking robots. You can watch a video about this new technology here:
The pilot takes place at a warehouse where a staff of 70 works for 8 hours per day at a payroll cost of $20 per hour per person. In addition to labor, this facility incurs $800 per day for rent and another $15,000 in miscellaneous expenses related to warehouse operations. AUmazon fulfills an average of 500 orders per day with Kiva robots in use. The new picking robots will increase order fulfillment capability to 1000 orders per day. The company will lay off 60 workers and the remaining workers will get a raise to receive $22 per hour per person and will continue to work 8 hours per day to monitor the warehouse operations. However, daily miscellaneous expenses will go up to $35,000. Compute the expected change in multifactor productivity for AUmazon if they invest in the picking robots by answering the questions below.
NOTE: SHOW ALL YOUR WORK. USE 4 DECIMAL PLACES IN YOUR CALCULATIONS.
- a)(1 point) What is (are) the input(s) that would be used to calculate productivity at AUmazon?
- b)(1 point) What is (are) the output(s) that would be used to calculate productivity at AUmazon?
- c)(1 point) Provide the exact formulato calculate multi-factor productivity for AUmazon. (Your answer should be in the form of an equation without any numbers or calculations.)
- d)(3 points) What is the expected percentage change in multifactor productivity at AUmazon if the company invests in the new material handling technology? NOTE: Use 4 decimal points in all your calculations. Do NOT round values to nearest whole numbers.
- e)(3 points) Conduct research and find articles on use of robots in the retail industry (online or brick-and-mortar stores). Identify three different waysin which retailers will benefit from using robots. Explain clearly how the robots will be used in the retail store or in the order fulfillment center and what the benefit will be. Make sure you state all sources of information, including references, videos, websites, in your answer.
NOTE:Your answer should be such that for the “benefit” should be associated with one or more performance metrics. For instance, using Kiva robots for retrieving items at a warehouse reduces the amount of time a service employee spends on non-value-added work (walking to a shelf to retrieve a product and walking back to the packing area with the product) and increases the processing capacity.
Question 2. (6 points)Eagle Physical Therapy is a small facility with 6 full-time specialists (i.e., the physical therapists). The facility has 7 lounges, each equipped with a bed and medical equipment. Only one patient is served in a lounge at a time. Each patient, accompanied by one specialist, occupies the lounge for 45 minutes during a physical therapy session. A specialist spends another 15 minutes per patient in his/her office after each session to document the work done and to prepare the plan for the patient’s next visit. The patients book their sessions in advance. The facility is open for appointments 6 days a week, 8 hours a day. Each specialist works 8 hours per day for 5 days a week. The same number of appointments are scheduled each day of the week.
NOTE: SHOW ALL YOUR WORK. USE 4 DECIMAL PLACES IN YOUR CALCULATIONS.
- a)(2 points) What is the weekly lounge utilization rate if 50 sessions are booked each day?
- b)(2 points) What is the weekly specialist utilization rate when 50 sessions are booked each day?
- c)(2 points) Suppose 66 sessions are scheduled per day to increase the lounge utilization rate. How many specialists can Eagle employ while keeping the weekly specialist utilization rate above 85%?
HINT:The weekly lounge capacity is determined by the number of operating days and the number of operating hours of the facility.
HINT:The weekly capacity of the specialists is determined by their operating hours and operating days.