1 24.10.2019 Case Question 1: Operations Strategy 1.a) Competitive Priorities and Capabilities Competitive priorities generally are cost, quality, flexibility, delivery and occasionally service. Carvine is a high-end furniture manufacturer, which means the cost of the product is not a competitive priority, while quality and delivery certainly are. Flexibility is only covered by the different models of chairs and service does not play a role in their business model, since they are never in face-to-face contact with their customers. 1.b) Customer Order Decoupling Point The customer order either comes in as an online order or as an order from furniture retailers. The orders are then collected until there is a full batch and then manufactured. This means Carvine operates on a made to order basis and should place the CODP between design and make. 1.c) Batch Principle Batch production drives down the cost of production a little bit, since machines can be set up for the whole batch while still allowing to produce a variety of products on one line. However, cost could be even lower if only one product would be made on every line, and production is held up for every order until enough orders for a whole batch have come in. In the case of Carvine this means also that only two different types of chairs can be produced on the same day, because the machines are not dedicated to one type and therefore some of them need a setup. The batch principle is well suited for Carvine for the above-mentioned reasons as well as the fact that only some of the machines need a special setup for each model, which means capital investment per model can be kept down.