2utdallas.edu/~metin
CRU case What does CRU stand for anyway? CRU is a computer rental company with a customer
base of – ?
– ?
– ?
CRU has two warehouses (Mega Centers) at ? and ? It has ? local retail centers.
4utdallas.edu/~metin
To understand the CRU operationsMake a flowchart
Customer
CRU rental’s facilities at a Mega center
5utdallas.edu/~metin
Flowchart with operations
Customer
Receiving
Diagnose
Configuration
Pre-Config
Orderparts
Performrepairs
Waitdelivery
6utdallas.edu/~metin
Flowchart with operations
Customer
Receiving????????
Configuration
?????????
?????????
Performrepairs
??????????
To where?
7utdallas.edu/~metin
Flowchart with operations and inventories
Customer
Receiving????????
Configuration
?????????
?????????
Performrepairs
??????????
To where?
S.40
S.24
S.41Not ordered
S.41Ordered
S.20
S.42
Receiving
8utdallas.edu/~metin
Add flow times and costs appropriately to inventories and delays
Flowchart with operations and inventories
Customer
???????????????
???????????
?????????
???
???
???
???
???
????????????
????????? ??????
???
9utdallas.edu/~metin
Utilization in 1996
Utilization=Inventory on rent / Inventory owned Number of computers on rent at any time
– ???? x ???? = ????
Number of computers owned by CRU?– Can use Little’s formula
» Inventory = Thruput x Flowtime
10utdallas.edu/~metin
Inventory in 1996: Completed
Customer Receiving S.24 S.40
S.41 Not
Ordered
S41
Ordered S.42 S.20
Thruput
Units/wk???? ???? ??? ??? ??? ??? ??? ????
Inventory
Units
???? ??? ???? ???? ???? ??? ??? ????
Flowtime
Weeks??? ??? ??? ??? ??? ??? ??? ???
Thruput from the top of p. 4 and the flowchartSome of the inventory from top of p. 4Some of the flowtime from the flowchartRemaining computed by Little’s formula.
Total inventory owned by CRU: ????? unitsUtilization=????/?????=??.?%Utilization >= 50%. No problem.
11utdallas.edu/~metin
Compute the profit per week in 1996
Revenue=Inventory on Rent x Rent per unit per week????*????=????
Cost=Ship+Receive+Pre-Config+Repair+DepreciateShip+Receive=????
Pre-Config=????
Repair=????
Depreciation=????
Cost=????
Profit=????
12utdallas.edu/~metin
Inventory in 1997: Flowtimes and Thruputs
Customer Receiving S.24 S.40
S.41 Not
Ordered
S41
Ordered S.42 S.20
Thruput
Units/wk??? ??? ??? ??? ??? ??? ??? ???
Inventory
Units???? ??? ???? ???? ???? ??? ???? ????
Flowtime
Weeks? ? ? ? ? ? ? ?
Keeping the same flowtimes due to competitionAdjust the thruputsCompute inventories from Little’s formula.
Total inventory owned by CRU: ???? unitsUtilization=????/????=??.?%.Utilization > 50%. No problem.
13utdallas.edu/~metin
Compute the profit per week in 1997
Revenue=Inventory on Rent x Rent per unit per week????*????=????
Cost=Ship+Receive+Pre-Config+Repair+DepreciateShip+Receive=????
Pre-Config=????
Repair=????
Depreciation=????
Cost=????
Profit=????
14utdallas.edu/~metin
Short term sales initiative in 1997 Every week,
– ??? units rented for ? weeks
– ??? units rented for ? weeks
Each unit rented for ? weeks,– Brings in a revenue of $??/week
Each unit rented for ? weeks – Brings in a revenue of $??/week
Note the discounting for the longer term rentals What is the average number of weeks a computer stays
with a customer? – 6 or 8 weeks or something else?
15utdallas.edu/~metin
Customer Receiving S.24 S.40
S.41 Not
Ordered
S41
Ordered S.42 S.20
Thruput
Units/wk???? ???? ?? ?? ????? ?? ?? ???
Inventory
Units?? ?? ? ? ? ??? ?? ???
Flowtime
Weeks? ? ? ?? ?? ? ??? ?
Keeping the same flowtimes except for the customerAdjust the thruputsCompute inventories from Little’s formula.
Total inventory owned by CRU: ????? unitsUtilization=????/?????=??.?%.Utilization < 50% or > 50%?
Inventory in 1997 with Short term sales initiative: Flowtimes and Thruputs
16utdallas.edu/~metin
Compute the profit per week in 1997 with theShort term sales initiative
Revenue=Inventory on Rent x Rent per unit per week????*????=????
Cost=Ship+Receive+Pre-Config+Repair+DepreciateShip+Receive=????
Pre-Config=????
Repair=????
Depreciation=????
Cost=????
Profit=????
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