lamson_corporation_case

lamson_corporation_case - Lamson Corporation In this game...

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1 Lamson Corporation In this game you will have the chance to try your skill at inventory and operations planning using the information similar in type to that available to Mr. Marino, the operations manager of Lamson Corporation, a large multi-plant manufacturer of sewer pipes. Every two weeks in the summer sales period, Mr. Marino had to decide how many tiles of each type and size should be produced during the coming two weeks. In doing this planning, he took into account sales trends, the time of the year, the capacity of Lamson’s tile making machinery, the stock of the various size tiles on hand, the cost of overtime production and the cost of missed deliveries. In this game you will be able to make similar decisions, although the game will be a simplified version of the actual situation. The most important feature of this simplification is that you will be dealing with only two sizes of sewer tile -- the 18” diameter size and the 36” diameter size. Mr. Marino, in contrast, had to decide on production levels for 13 different sizes of tile and which plants would produce what mix. SALES PATTERNS Company sales, and industry sales in general, were very much influenced by general economic and seasonal factors. Since weather affected tile laying conditions and the number of construction starts, sales of sewer tiles exhibited a yearly sales trend of the following general shape (Figure 1). Sales were low for 6 months, from October 1 to April 1, and rose rapidly in the spring to a summer peak and then tapered off again. About 1/3 of all annual sales were made in the two middle months of the year, while about 3/4 were made in the summer sales season of 6 months. However, there was not necessarily a smooth rise and fall in sales in any particular year. The curve shown is only the average of the experiences of many years. In any given year, biweekly sales might vary + 20% from levels observed in the previous year. The sales during the summer months in the past three years are given in Exhibit 1. The industry was quite mature and the company did not expect any significant sales growth relative to last year. Major fluctuations in annual sales and mix levels were caused by economic and weather conditions. April May June July Aug Sep Oct Figure 1
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2 Exhibit 1 Sales during the past three years 18" TILES 36" TILES Period 1995 1996 1997 1995 1996 1997 April-I 2165 2121 2404 815 683 646 April-II 2656 1919 2477 962 1188 897 May-I 3099 2834 3168 1719 1647 1341 May-II 4910 4801 4489 1721 1651 1625 June-I 4644 4594 3829 1805 1385 1577 June-II 4762 5530 5357 2488 2271 2085 July-I 5183 4443 4302 1570 1940 1851 July-II 5189 5248 5046 2238 1743 2057 August-I 3473 4578 4297 2119 1973 2429 August-II 3274 3198 3554 2005 2002 2108 September-I 2699 2813 2966 927 1374 1235 September-II 1796 1878 2200 805 786 830 In the game you are about to play, Period 1 refers to the first two weeks in April. Thus, company sales are just leaving the low part of the annual swing. The season culminates in Period 12, the
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This note was uploaded on 07/21/2009 for the course BUAD 311T taught by Professor Vaitsos during the Fall '07 term at USC.

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lamson_corporation_case - Lamson Corporation In this game...

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