Case Study 1 :-
Read the case carefully and answer the questions at the end of the case.
Good Shepherd Home
The Good Shepherd Home is a long-term care facility with an 80-bed capacity located in San Mateo, California. Mr. Scott, the administrator is concerned bout rising food costs. He questions whether administration is efficient as it might be and realizes that food, a "raw material" for his food services, has increases in price significantly. Mr. Scott decides to investigate food services more closely.
Analyzing last month's purchased items, Mr. Scott summarizes a random selection of items. Mr. Scott wonders what interpretation he should make about these typical items. He has looked at 100 stock items and is considering tighter controls (dozens, cases, pounds, etc.) have been ordered.
Typical Inventory Items
Number of Stock Items Quantity Ordered (in units) Total Cost (in $) Average Inventory (in $)
3 50 3,500 1,200
12 150 2,500 900
20 200 1,500 600
40 400 2,000 200
25 200 500 200
Of particular interest is a problem with a perishable good. Since the home has residents in independent living units and eating at the home irregularly, bread demand is uneven. Bread is delivered daily and is used that day for table meal service only; the day-old bread is salvaged for dressing and similar dishes. Scott estimates the cost of bread to be $0.75% loaf and the cost of day-old bread to be $0.25%loaf, Scott says, "We should not be out of fresh bread at the table. Although man cannot live by bread alone, it is very important to our residents. I put a high cost on being out of bread -- considerably more than the cost of a loaf, In fact, I think every time we run out of bread, it costs a dollar per loaf short in goodwill last from our residents."
Knowing how Mr. Scott feels, the food services supervisor has a standing order for 30 loaves/day and twice that amount on Sunday. The demand for bread for the last two weeks is shown below:
Bread Demand (in loaves)
Day Week 1 Week 2
Mon 20 19
Tue 15 27
Wed 21 20
Thu 30 32
Fri 31 27
Sat 19 16
Sun 42 39
In conversation with Mr. Scott, the supervisor says, "I recently heard about cost tradeoffs in food service inventory. I can't really see what item cost, carrying cost.ordering cost, and stockout cost have to do with proper nutrition. I try to buy good quality foods and spend less than $5/day on food for each resident. That's my objectives."
Mr. Scott has heard, too, about cost tradeoffs, but he wonders what they mean and how they apply to a nursing home environment, To try to understand this better he talked to his bookkeeper. The supervisor says that she knows with certainty that demand for hamburger over a menu cycle is 200 pounds. Furthermore, the bookkeeper estimates it costs $12 to place an order and 20 percent of the hamburger cost to carry hamburger in inventory. Hamburger costs $1.55/pound. The dietitian says a menu cycle lasts two weeks and Good Shepherd currently orders hamburger every week. Mr. Scott is puzzled by all this.
Questions:
1. What is the problem associated in the case?
2. How do you solve the bread problem, which is a perishable good? Could you find out the optimum size (EOQ) of the bread that must be ordered?
From India, Madras
3Read the case carefully and answer the questions at the end of the case.
Good Shepherd Home
The Good Shepherd Home is a long-term care facility with an 80-bed capacity located in San Mateo, California. Mr. Scott, the administrator is concerned bout rising food costs. He questions whether administration is efficient as it might be and realizes that food, a "raw material" for his food services, has increases in price significantly. Mr. Scott decides to investigate food services more closely.
Analyzing last month's purchased items, Mr. Scott summarizes a random selection of items. Mr. Scott wonders what interpretation he should make about these typical items. He has looked at 100 stock items and is considering tighter controls (dozens, cases, pounds, etc.) have been ordered.
Typical Inventory Items
Number of Stock Items Quantity Ordered (in units) Total Cost (in $) Average Inventory (in $)
3 50 3,500 1,200
12 150 2,500 900
20 200 1,500 600
40 400 2,000 200
25 200 500 200
Of particular interest is a problem with a perishable good. Since the home has residents in independent living units and eating at the home irregularly, bread demand is uneven. Bread is delivered daily and is used that day for table meal service only; the day-old bread is salvaged for dressing and similar dishes. Scott estimates the cost of bread to be $0.75% loaf and the cost of day-old bread to be $0.25%loaf, Scott says, "We should not be out of fresh bread at the table. Although man cannot live by bread alone, it is very important to our residents. I put a high cost on being out of bread -- considerably more than the cost of a loaf, In fact, I think every time we run out of bread, it costs a dollar per loaf short in goodwill last from our residents."
Knowing how Mr. Scott feels, the food services supervisor has a standing order for 30 loaves/day and twice that amount on Sunday. The demand for bread for the last two weeks is shown below:
Bread Demand (in loaves)
Day Week 1 Week 2
Mon 20 19
Tue 15 27
Wed 21 20
Thu 30 32
Fri 31 27
Sat 19 16
Sun 42 39
In conversation with Mr. Scott, the supervisor says, "I recently heard about cost tradeoffs in food service inventory. I can't really see what item cost, carrying cost.ordering cost, and stockout cost have to do with proper nutrition. I try to buy good quality foods and spend less than $5/day on food for each resident. That's my objectives."
Mr. Scott has heard, too, about cost tradeoffs, but he wonders what they mean and how they apply to a nursing home environment, To try to understand this better he talked to his bookkeeper. The supervisor says that she knows with certainty that demand for hamburger over a menu cycle is 200 pounds. Furthermore, the bookkeeper estimates it costs $12 to place an order and 20 percent of the hamburger cost to carry hamburger in inventory. Hamburger costs $1.55/pound. The dietitian says a menu cycle lasts two weeks and Good Shepherd currently orders hamburger every week. Mr. Scott is puzzled by all this.
Questions:
1. What is the problem associated in the case?
2. How do you solve the bread problem, which is a perishable good? Could you find out the optimum size (EOQ) of the bread that must be ordered?
From India, Madras
Is this your assignment case study? If so, for what course? Are you looking for a ready-made solution which you can use?
From United Kingdom
From United Kingdom
Thanks for your prompt response
MBA on Production Management.
I got an email with my college Alumni group to suggestion some information on this case study. I have made some point on this which are not so appropriate to reply back to my junior group. So I decided to put into Citehr to make myself clear to reply for the same in detail.
Thanks
Mohamed
From India, Madras
MBA on Production Management.
I got an email with my college Alumni group to suggestion some information on this case study. I have made some point on this which are not so appropriate to reply back to my junior group. So I decided to put into Citehr to make myself clear to reply for the same in detail.
Thanks
Mohamed
From India, Madras
Thank you Mohamed for your clarification. I have taught Production Management for MBAs, but I am not in the habit of giving answers on-a-plate. If students give their answers and then seek help, to check if they are on the right lines, I oblige. I suggest that you also do the same, rather than try to get them solutions.
From United Kingdom
From United Kingdom
PLease share me the solution for the following case study.
Good Shepherd Home
The Good Shepherd Home is a long-term care facility with an 80-bed capacity located in San Mateo, California. Mr. Scott, the administrator is concerned bout rising food costs. He questions whether administration is efficient as it might be and realizes that food, a "raw material" for his food services, has increases in price significantly. Mr. Scott decides to investigate food services more closely.
Analyzing last month's purchased items, Mr. Scott summarizes a random selection of items. Mr. Scott wonders what interpretation he should make about these typical items. He has looked at 100 stock items and is considering tighter controls (dozens, cases, pounds, etc.) have been ordered.
Typical Inventory Items
Number of Stock Items Quantity Ordered (in units) Total Cost (in $) Average Inventory (in $)
3 50 3,500 1,200
12 150 2,500 900
20 200 1,500 600
40 400 2,000 200
25 200 500 200
Of particular interest is a problem with a perishable good. Since the home has residents in independent living units and eating at the home irregularly, bread demand is uneven. Bread is delivered daily and is used that day for table meal service only; the day-old bread is salvaged for dressing and similar dishes. Scott estimates the cost of bread to be $0.75% loaf and the cost of day-old bread to be $0.25%loaf, Scott says, "We should not be out of fresh bread at the table. Although man cannot live by bread alone, it is very important to our residents. I put a high cost on being out of bread -- considerably more than the cost of a loaf, In fact, I think every time we run out of bread, it costs a dollar per loaf short in goodwill last from our residents."
Knowing how Mr. Scott feels, the food services supervisor has a standing order for 30 loaves/day and twice that amount on Sunday. The demand for bread for the last two weeks is shown below:
Bread Demand (in loaves)
Day Week 1 Week 2
Mon 20 19
Tue 15 27
Wed 21 20
Thu 30 32
Fri 31 27
Sat 19 16
Sun 42 39
In conversation with Mr. Scott, the supervisor says, "I recently heard about cost tradeoffs in food service inventory. I can't really see what item cost, carrying cost.ordering cost, and stockout cost have to do with proper nutrition. I try to buy good quality foods and spend less than $5/day on food for each resident. That's my objectives."
Mr. Scott has heard, too, about cost tradeoffs, but he wonders what they mean and how they apply to a nursing home environment, To try to understand this better he talked to his bookkeeper. The supervisor says that she knows with certainty that demand for hamburger over a menu cycle is 200 pounds. Furthermore, the bookkeeper estimates it costs $12 to place an order and 20 percent of the hamburger cost to carry hamburger in inventory. Hamburger costs $1.55/pound. The dietitian says a menu cycle lasts two weeks and Good Shepherd currently orders hamburger every week. Mr. Scott is puzzled by all this.
Questions:
1. What is the problem associated in the case?
2. How do you solve the bread problem, which is a perishable good? Could you find out the optimum size (EOQ) of the bread that must be ordered?
From India, Hyderabad
Good Shepherd Home
The Good Shepherd Home is a long-term care facility with an 80-bed capacity located in San Mateo, California. Mr. Scott, the administrator is concerned bout rising food costs. He questions whether administration is efficient as it might be and realizes that food, a "raw material" for his food services, has increases in price significantly. Mr. Scott decides to investigate food services more closely.
Analyzing last month's purchased items, Mr. Scott summarizes a random selection of items. Mr. Scott wonders what interpretation he should make about these typical items. He has looked at 100 stock items and is considering tighter controls (dozens, cases, pounds, etc.) have been ordered.
Typical Inventory Items
Number of Stock Items Quantity Ordered (in units) Total Cost (in $) Average Inventory (in $)
3 50 3,500 1,200
12 150 2,500 900
20 200 1,500 600
40 400 2,000 200
25 200 500 200
Of particular interest is a problem with a perishable good. Since the home has residents in independent living units and eating at the home irregularly, bread demand is uneven. Bread is delivered daily and is used that day for table meal service only; the day-old bread is salvaged for dressing and similar dishes. Scott estimates the cost of bread to be $0.75% loaf and the cost of day-old bread to be $0.25%loaf, Scott says, "We should not be out of fresh bread at the table. Although man cannot live by bread alone, it is very important to our residents. I put a high cost on being out of bread -- considerably more than the cost of a loaf, In fact, I think every time we run out of bread, it costs a dollar per loaf short in goodwill last from our residents."
Knowing how Mr. Scott feels, the food services supervisor has a standing order for 30 loaves/day and twice that amount on Sunday. The demand for bread for the last two weeks is shown below:
Bread Demand (in loaves)
Day Week 1 Week 2
Mon 20 19
Tue 15 27
Wed 21 20
Thu 30 32
Fri 31 27
Sat 19 16
Sun 42 39
In conversation with Mr. Scott, the supervisor says, "I recently heard about cost tradeoffs in food service inventory. I can't really see what item cost, carrying cost.ordering cost, and stockout cost have to do with proper nutrition. I try to buy good quality foods and spend less than $5/day on food for each resident. That's my objectives."
Mr. Scott has heard, too, about cost tradeoffs, but he wonders what they mean and how they apply to a nursing home environment, To try to understand this better he talked to his bookkeeper. The supervisor says that she knows with certainty that demand for hamburger over a menu cycle is 200 pounds. Furthermore, the bookkeeper estimates it costs $12 to place an order and 20 percent of the hamburger cost to carry hamburger in inventory. Hamburger costs $1.55/pound. The dietitian says a menu cycle lasts two weeks and Good Shepherd currently orders hamburger every week. Mr. Scott is puzzled by all this.
Questions:
1. What is the problem associated in the case?
2. How do you solve the bread problem, which is a perishable good? Could you find out the optimum size (EOQ) of the bread that must be ordered?
From India, Hyderabad
Need solutions for the attached essays. 1) Good Shepherd Home 2) Nartha Thompson 3) COMPANY BACKGROUND
From India, Hyderabad
From India, Hyderabad
Dear Premreddy1982,
Thank you for appreciating my post. I prefer that bloggers digest my messages and act upon it, instead of just appreciating my posts. Please read my second message above and do the needful. What course are you doing, where and in what mode?
From United Kingdom
Thank you for appreciating my post. I prefer that bloggers digest my messages and act upon it, instead of just appreciating my posts. Please read my second message above and do the needful. What course are you doing, where and in what mode?
From United Kingdom
doing MBA in operations management can u suggest me the solution for the above mentioned case study for me
From India, Hyderabad
From India, Hyderabad
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