OPERATIONS MANAGEMENT ASSIGNMENT Case Solution & Answer

 OPERATIONS MANAGEMENT ASSIGNMENT Case Solution

Facility

            Under the facility, all the costs associated with the process technology of Suzuki, equipment and the size of the facility are included. For instance, Suzuki makes high use of automation and the company has a high degree of vertical integration within its entire supply chain. Lastly, the large facility scale of the company also has an impact on the cost of its products.

Geography

            Under the geography part, all the costs associated with the location of the facility with respect to the customers are considered. For instance, Suzuki pays different wage rates in different facility locations of the company. This also has an impact on the final cost due to the differences in the transportation costs to the customers.

Execution

            Finally, the execution covers all the operations of the facilities and it is the execution which differentiates between a well-run facility and a poorly run facility. For instances, in certain facilities of Suzuki in India, the rejection rates are high and labor productivity is low. This affects the overall facility utilization.

Decision Areas & Operations Strategy

Based on the above cost driver framework, the key decision areas for the management of the company are to hire the best class workers and choose the most productive facility locations for the company with respect to its workers and customers. The operations strategy of the company should emphasize on high productivity and customer satisfaction. This could be achieved by maintaining prices through value added engineering and using fuel efficient plants such as K-engine in its facilities. Each employee of the company should work as a cost manager and in order to maintain quality, every employee should accept the do it right first time principle.

Question 5

            The impact of the new, combined and shortened India Residency of the future is shown in the table below. The calculations could be seen in the excel spreadsheet.

Critical Metric	Current Value	Likely change: Up, Down, Same?	Future Value
Total India Tuition “Earned”	$700,000	 Up	 $          933,333
India Residency Contribution	($3,000)	Down	 $           (67,147)
Cost Per Student	$25,107	Down	 $            17,866
Cost Per Student Per Day	$1,674	Up	 $              1,787

……………….

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