1 Running Head: Operation Management 4 Operation Management Internal Assessment Survey January 29th, 2018 IntroductionOur multinational company has recently decided to prepare a Request for Proposal (RFP) that will help it solicit competitive bids before purchasing steel to be used in different branches across the US and other countries. The boss in my branch is assigned the responsibility of developing the RFP within three months. He has delegated to me the task of developing an internal data collection tool, which will help in identifying the key questions to be included within the RFP. The internal data collection tool consists of a survey of the respondents being managers from different branches across the US and globe. The survey will be administered to the managers via email. Consequently, I intend to develop a project plan to guide the execution of the survey within the stipulated deadline.Project Management ApproachThe boss will serve as the project manager and will have the overall responsibility and authority for managing and implementing this survey according to this project plan. The RFT team will comprise of personnel from various departments with various expertise. The project manager will cooperate with project sponsors to ensure that all funding necessary are made in time. Project Scope The scope of this survey include sending the survey to managers across the US and globe, selecting and training RFP team, creating an RFT timeline and developing of criteria for inclusion of a question in the RFT. Milestone List Below is a list of the major milestones for the survey project. In case of any scheduling delay that may affect completion date, the involved party must notify the project manager immediately so as to take proactive measures that may mitigate projects delays. Milestones Description Days Complete sending the survey instruction to managers Within the first 10 days, the project leader designs the survey instructions, acquire email contacts of all the managers across the US and the globe and send it to all of them. 10 Selection of RFP team Before the end of 20 days, a team of 30 people from different departments will be selected to work on the RFT. 20 Training of RFT team All team members will receive training to understand technology used and the questionnaire. 30 Receiving responses from managers All managers will be expected to return their proposed questions and viewpoints on the preparation of the RFT 40 Shortlisting key questions from the responses The RFT team will go through all the responses from the managers noting down main contributions from the responses. 60 Selecting the questions to appear in the RFT The team will agree on the final questions to be included in the RFT and they must not exceed 10 questions. 65 Presenting the RFT to the project manager The boss will receive the proposed questions where he will either approve them or recommend some changes. 75 Drafting the final global RFT T ...

1. 1
Running Head: Operation Management
4
Operation Management
Internal Assessment Survey
January 29th, 2018
IntroductionOur multinational company has recently decided to
prepare a Request for Proposal (RFP) that will help it solicit
competitive bids before purchasing steel to be used in different
branches across the US and other countries. The boss in my
branch is assigned the responsibility of developing the RFP
within three months. He has delegated to me the task of
developing an internal data collection tool, which will help in
identifying the key questions to be included within the RFP.
The internal data collection tool consists of a survey of the
respondents being managers from different branches across the
US and globe. The survey will be administered to the managers
via email. Consequently, I intend to develop a project plan to
guide the execution of the survey within the stipulated
deadline.Project Management ApproachThe boss will serve as
the project manager and will have the overall responsibility and
authority for managing and implementing this survey according
to this project plan. The RFT team will comprise of personnel
from various departments with various expertise. The project
manager will cooperate with project sponsors to ensure that all
funding necessary are made in time. Project Scope
The scope of this survey include sending the survey to managers

2. across the US and globe, selecting and training RFP team,
creating an RFT timeline and developing of criteria for
inclusion of a question in the RFT. Milestone List
Below is a list of the major milestones for the survey project. In
case of any scheduling delay that may affect completion date,
the involved party must notify the project manager immediately
so as to take proactive measures that may mitigate projects
delays.
Milestones
Description
Days
Complete sending the survey instruction to managers
Within the first 10 days, the project leader designs the survey
instructions, acquire email contacts of all the managers across
the US and the globe and send it to all of them.
10
Selection of RFP team
Before the end of 20 days, a team of 30 people from different
departments will be selected to work on the RFT.
20
Training of RFT team
All team members will receive training to understand
technology used and the questionnaire.
30
Receiving responses from managers
All managers will be expected to return their proposed
questions and viewpoints on the preparation of the RFT
40
Shortlisting key questions from the responses
The RFT team will go through all the responses from the
managers noting down main contributions from the responses.
60
Selecting the questions to appear in the RFT
The team will agree on the final questions to be included in the

3. RFT and they must not exceed 10 questions.
65
Presenting the RFT to the project manager
The boss will receive the proposed questions where he will
either approve them or recommend some changes.
75
Drafting the final global RFT
The final draft of the global Request for Proposal will be
created and presented.
90Communication management plan
The project manager and team leader are expected to ensure
effective communication throughout the project. Professional
emails will be the primary communication channel to share
information among participants. Meeting agenda will be
distributed to all members of the team by the project manager at
least two days before the meeting date to allow the participant
to review it before the meeting. The following is the standard
template that will be used in recording the minutes.
Meeting Minutes Template
Meeting Name:
Date of Meeting:
Time:
Facilitator
Location:
A. Meeting Objective
B. Attendance at Meeting
Name
Department

4. E-mail
Phone
C. Meeting Agenda and Decisions, Notes, Issues
Topic
Owner
Time

5. D. Action Items
Action
Owner
Due Date
E. Next Meeting, if applicable
Date:
Time:
Location:
Objective:
Be sure to submit the answers for ALL THREE parts!
Case 3
Light Up My Light, Inc.

6. The basic scenario for LUML continues.
In working cases, we typically want much more information
than is presented in the case. Of course, even in the “real
world” we do not always have all the information (and time)
that we would like. Basically, stick to the information in the
case. If you need to make any assumptions, then be sure to
make these clear in your answers.
It is now mid-2017.
During the last weekly review, the CEO (still Elise Ennis)
expressed some concerns about the warehousing operations.
She has no real feel for the efficiency of the warehouses. The
operations “strike her” as being somewhat expensive. And her
impression is that “the cost for each warehouse is sort of all
over the place.”
The CEO asked if it would be possible to do a quick analysis of
the warehousing function. [Of course, that was a rhetorical
question. As you might expect, the answer from Tom Perkins
the VP/head of logistics was “sure we can do an analysis for
you”.]
The CEO said that she would send over some more specific
questions after the meeting.
As a logistician for the company you are to play a key role in
doing the analysis and reporting the results to the CEO.
In preparation for the analysis you asked the Comptroller for
some financial information. The Comptroller provided the
financial statements (income statement & balance sheet) for
2017, the most recent complete year. These are attached.
You also asked the VP who oversees warehousing operations for
some data. The manager of warehouse operations sent over the
most recent data that was available. The VP explained that
LUML has been using the number of shipments as a key metric
for warehousing. No distinction is made between an incoming
shipment or an outgoing shipment. They believe that the work

7. effort for either type of shipment is about the same. The
shipment information is also attached.
You ask if there is any other information that you should know -
- any peculiarities of warehousing operations for LUML? The
VP mentions a few things that he says are not so obvious.
#1. The Melbourne warehouse is co-located with the Melbourne
manufacturing plant & the company’s headquarters.
#2. All manufacturing is done in-house in Melbourne.
#3. All the warehousing facilities are in leased buildings
(including the one in Melbourne). So that aspect is standard for
all 8 warehouses.
#4. The Melbourne facility is “company operated”. As the
original warehouse, the warehouse staff are all employees of
LUML.
#5. As the need arouse for other warehouses/shipping centers,
the VP at that time decided to try what was then a relatively
new concept. The work at these other sites was contracted out
to local operators at each site. The contractors follow basic
LUML policies, etc. These operations are what was to become
known as 3PL (third party logistics). [Note: If you want to
read more on 3PL in our book, then check in the index.
However, for this case all that you basically need to realize is
that these warehouses are each operated by a separate local
operator under contract to LUML.]
#6. Shipments tend to be relatively homogeneous over all the
sites. A typical shipment has one to three fixtures. Even the
shipments from Melbourne fit this model because of the
specialty nature of most of the fixtures.
#7. As might be expected, most shipments form Melbourne are
outgoing to customers or to the other warehouses.
You thank the VP and head back to your office.
When you arrive, you find a note on your desk from Tom
Perkins. This is forwarding the questions that the CEO had
promised to send over.

8. [Your name]
Here are the questions from the CEO.
Please prepare a written memo to reply. Mrs. Ennis is a “data
freak” and so likes to look at the backup numbers and analysis.
Be sure to include the basic work that was done. Simple
calculations might be in the narrative; more complex might need
to be in an attachment.
Thanks,
Tom
Tom Perkins
VP for Logistics
Tom Perkins
Logistics
Tom,
Ref the weekly briefing. Here are the things that jumped into
my mind as the topic was being discussed and when I thought
about it later in the day. Of course, we are very interested in
efficiency and effectiveness. I think that I also mentioned that
it seems to me that we have a pretty wide range of warehousing
costs over our 8 warehouses.
I’d like the memo per our schedule. Thanks.
Elise
#5. (100 pts) The year 2017 is close to being half over. How
much is LUML likely to spend for warehousing for the rest of
the year? How much for the full year? Is this better or worse

9. than budgeted? I’d like to see this information for each
warehouse; and, the total for all our warehousing operations).
Briefly explain your work and answers. [Hint: did you make
any assumptions that the CEO should know about?]
#6. (100 pts) Using the 2016 financial statement, what would
our Strategic Profit Model (SPM) look like? Briefly interpret
the results. Briefly interpret two of the key items that most
relate to logistics.
#7. (100 pts) I’d like to reduce shipping costs. Holding all
other information constant, what would be the effect on ROA if
our warehousing/shipping costs declined 10 percent? Explain.
[Hint: It should be obvious that the CEO is not looking for a
simple answer --- ROA increases/does not change/decreases.
Best to compute and explain the actual change?]
#8. (50 pts) I do not expect the costs to be identical for all
warehouses. But is there too great a range in costs per unit
between the warehouses? Explain.
#9. (100 pts) What is your overall analysis and
recommendation (or recommendations) to help us to achieve our
objectives? Briefly explain.
#10. (50 pts) I have heard a bit about logistics and a logistics
chain. How can warehouse operations be an activity in the
logistics channel? Please provide a short explanation.
#11. (50 pts) The Comptroller told me that there is probably a
bit of money that could be put into our information systems.
How can IS/IT be applied in warehousing operations at LUML?
[Hint: recall that we looked at many types of IS/IT. You might
include whether each type likely has the potential to help meet
the CEO’s goal to reduce warehousing expenses and reduce the
range.]

10. -=-=-=
REMEMBER THAT THERE ARE OTHER GRADED
ELEMENTS THAT ARE NOT SEPARATELY LISTED (e.g., on
time; format and completeness; purpose).
-=-=-=-
Your mission? Prepare a memo to the CEO with the answers to
her questions. Remember that you also need to send your
supporting analysis. The material should be organized as you
would send to a senior official. And you should also be sure to
cite any material used that is not your own.
The reason that we do this type of analysis is to help manage
better, to solve problems, and the like. Interpreting the
information in relation to the business situation is important.
****
Keep in mind
#1 the answer to each question needs to be easily
identifiable. The CEO is almost certainly not going to
remember the details of each question that she asked. There is
at least a week between the question being asked and reply
expected. And she is unlikely to “go looking” for the answer
somewhere in a document. [On the other side of the coin, for
your purposes, you want to make sure that you answered each of
the questions.]
#2 in most cases the CEO has asked you to explain your
answers. So, each answer needs to have the answer plus the
supporting rationale. However, that does not mean that each
answer/explanation needs to be pages long! Some of the backup
work might be a bit lengthy, but most of it is very brief. The
answer itself and the rationale will usually only be a couple of
sentences.
-=--=
Light Up My Light, Inc.
Income Statement 2016
Sales

11. $4,003,450
Cost of goods sold
$937,000
Gross margin
$3,066,450
Transportation cost
$657,322
Warehousing cost
$735,982
Inventory carrying cost
$567,987
Other operating cost
$345,876
Total operating costs
$2,307,167

12. Earnings before interest and taxes
$759,283
Interest
$110,000
Taxes
$69,000
Net income
$580,283
Light Up My Light, Inc.
Balance Sheet as of December 31, 2016
Assets

13. Cash
$706,034
Accounts receivable
355,450
Inventory
1,590,435
Total current assets
$2,651,919
Net fixed assets
803,056
Total assets
$3,454,975
Liabilities

14. Current liabilities
$1,678,589
Long term debt
398,060
Total liabilities
$2,076,649
Shareholders’ equity
1,378,326
Total liabilities and equity
$3,454,975
-=-=-
Here is the information that you asked for. We have been using
the number of shipments as a basic metric. That seems to have
served us well over the years. At first blush, given the CEO’s
questions and areas of interest, you may need to revise the
metric being used.
Light Up My Light, Inc.
Warehouse operations performance data (special run)
2016

15. 2017
Units shipped
Warehouse expense
Units shipped
Warehouse expense
Location
Actual
Jan-Dec
Actual
Jan-May
Actual
Jan-Dec
Actual
Jan-May
Projected
Jan-Dec
Actual
Jan-May
Budgeted
Jan-Dec
Actual
Jan-May
Akron
12,437
4,080
$156,803
$35,890

16. 15,000
4,035
$178,000
$40,228
Buffalo
6,920
3,061
$63,417
$27,915
7,200
3,119
$73,000
$29,416
Melbourne
32,104
14,621
$246,315
$131,618
38,000
15,230
$305,000
$141,222
Detroit z
3,021
1,005z
$28,019
$8,600z

17. 3,100
1,421
$31,000
$14,900
Cleveland
2,016
980
$16,411
$8,883
2,000
804
$17,000
$9,605
Los Sanna
12,491
11,431
$151,975
$109,690
17,000
9,444
$176,000
$93,280
Portland
8,333
4,028
$73,015
$36,021

18. 9,000
4,600
$85,000
$42,616
St. Louis
5,921
2,331
$51,819
$23,232
8,000
2,116
$56,000
$19,191
Note z: In March 2016, the warehouse was closed for two
weeks due to a strike.

19. -=-=-=
Case 3, Part 3
Light Up My Life, Inc.
During the weekly meeting, the topic of “Supply Chains” and
“Supply Chain Management” came up.
The CEO asked if she could get some information on the
following:
(100 points for each question. Remember that there are also
other standard graded elements that are not separately listed.)
#1 What, indeed, is a supply chain?
#2 How does logistics fit into a supply chain model?
#3 In general, should LUML be looking at the possible use of
Supply Chain Facilitators?
** If yes, then from a general management perspective, what
types of facilitators might be considered?
** If yes, then from a logistics perspective, what types of
facilitators might be considered?
** If yes, then what might be some key considerations on how a
facilitator could be used?
Tom, our VP, says that he will have a memo sent to the CEO in
a few days with the information. After the meeting he asks you
to write up the memo.
[You are not restricted on the length, but a very nice answer can
be prepared in -- say -- one page -- or even less -- per question.
Remember that the CEO is asking this, so she must not be very
familiar with these concepts.
Sometimes a good figure can help a great deal. But very few
figures are “stand alone” in their own right. Most figures also

20. need some explanation.]