AMBA 640 / AMBA 640 HYBRID COURSE
MATERIALS

ASSIGNMENTS
Acme Mexico City and Application of World-Class Operations and Information
Systems Management Techniques and Production Planning and Strategy for Toyota North
America
(Version 06/01/15)

Background Information for Acme Mexico City
Acme Home Improvements, Inc. was founded in 1982 in Raleigh, North Carolina,
USA. By mid 2015, the company had 125 stores along the US East Coast from
Florida to Maine. Its annual sales are currently ~$5,400,000,000 with
$280,000,000 net income. The average store is about 100,000 square feet with an additional 10,000 square feet of outside garden center. The stores typically carry 40,000 different products from 5,000 vendors worldwide. Major US competitors include Ace, Home Depot, Lowe's, and TruValue. All four operate already in Mexico.

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In the interests of seeking greater profits and buffering against downturns in the
US market, Acme has determined to follow these and other competitors to
Canada and Mexico. In the latter, it has established, in accordance with Mexican law, a joint venture with local interests, known as Acme Home Improvements de
México, SA de CV ("Acme de México" or "Acme Mexico City"). (SA de CV
= Sociedad Anónima de Capital Variable, a Mexican corporate form.)
There are five major product groups within each Acme store: plumbing and electrical supplies, building materials, hardware and tools, seasonal and garden/yard items, and paint, flooring and wall coverings.
Each store has a store manager, assistant store manager, bookkeeper, an information systems manager and an assistant, a manager for each of the five major product groups, customer service employees on the store floor to assist customers with their purchases, cashiers, receiving/stocking employees, and maintenance/janitorial employees.

Assignment 1. Team Assignment: Preparing a Team Work Plan due in Week 2, Project Charter - due in Week 2, and Project
Management Plan - due in Week 3 - for Acme Mexico City
Overview
Working in teams, students will demonstrate competency in project management by preparing an international project management plan for the construction and operation of a substantial retail store in another country. The country selected is Mexico. The retail store will be Acme Mexico City.
The team will include a team work plan and project charter as parts of the project management plan.
Optionally and for extra credit, the team will also prepare and present a 20-30 minute business-focused presentation of their plan. At the team’s choice, the presentation may be made either online and live, or by video.
The plan should treat each of the 10 project management knowledge areas established in the Project Management Body of Knowledge, 5e, and will be in pdf format accompanied by a work breakdown including critical path prepared with a project management software such as MS-Project in its format (mpp for MSProject).

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Critical thinking, managerial decision-making, cultural understanding, information literacy, problem solving, systems thinking, and technology fluency are all required. Assignment
Acme de México has purchased a site on which it intends to build and open a new store in Mexico City [Acme Mexico City (AMC)]. The store will have the
Acme average 100,000 square feet of indoor space and 10,000 square feet of exterior space for garden products. In addition, a two-story parking garage will be built directly adjacent to the store. It is desired that the project should take no longer than12 months. The store construction and opening processes include at least eight major activities. Hint: one necessary major activity is omitted; which is it? THINK CRITICALLY

1.
2.
3.
4.
5.
6.
7.
8.

Obtain required licenses and permits.
Prepare the site and lay the foundation.
Build the walls, floor, and roof of the structure.
Install electrical and plumbing fixtures.
Finish interior and stock inventory.
Build the garage.
Complete all paving and landscaping.
Hire and train employees.

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AMC will, it is envisioned, be similar in appearance to this Home Depot store located in Hermosillo, Sonora, Mexico

Photo by Professor (Dr.) Judith L. Forbes
First, each team prepares a team work plan and a project charter for the construction, equipping and opening of the Mexico City store to include a list of major milestones. These are due as specified in the LEO classroom. The section professor may require revisions to improve these documents.
Each team then prepares a project management plan, which also is due as specified in the LEO classroom and includes at least the following:

1. An executive summary including key projected results
2. A work breakdown structure (WBS) using Microsoft Project 2013 or

equivalent project management software. The WBS need not go below the top three levels of tasks.
3. The establishment of all required dependencies for activities.
4. The estimated requirements for money, materials, and people including local (Mexican) expertise. Here also recall what you learned about budgeting in AMBA 630 and about meeting stakeholder needs in
AMBA 610/620.
5. A Gantt chart for project display, including a complete critical path.

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6. A discussion of the utility of a project dashboard for management of this project, to include your judgment of its cost effectiveness. Who would maintain it?
7. A discussion of how knowledge gained from prior Acme store construction projects could be applied to this project.

Your section professor may amplify your specific taskings in his or her instructions for this assignment.
Tip: when the work breakdown structure is complete, the team, thinking critically, will have included the principal topic of the forthcoming AMBA 650 course. Assignment 2. Individual Assignment: Employing Important
Techniques Used in Operations Management - due in Week 5
Overview
Working individually, students will demonstrate competency in operations management by analyzing three operations management techniques and applying them to improve Acme Mexico City's operations in an integrated report. Two of the techniques are mandatory. They are:



Data-driven decision-making aka data analytics
Linear programming

The student will select the third technique from the following list:




Decision support systems
Outsourcing to include offshoring, reshoring, and next/nearshoring
Sustainable supply chain management

The student will submit a report in pdf format that integrates their three analyses and the applications to Acme Mexico City.
Follow the format provided for text assignments in this course.
Specifically, include an executive summary.
Critical thinking, information literacy, problem solving, systems thinking, and technology fluency are required.

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Assignment
Within your analyses on the first - Data-driven decision-making aka data analytics and third - your choice of one from among




Decision support systems
Outsourcing to include offshoring, reshoring, and nextshoring
Sustainable supply chain management

- techniques, please address the following:








What is the general purpose of the technique?
How does or should this help operations in general?
What are the limitations of the technique?
What are the costs involved? What training is needed to use the technique? What else is needed?
At Acme Mexico City, what is the problem, opportunity, or challenge that this technique can address?
How will the technique help Acme Mexico City's operations? Why?

What would be the areas that present challenges in the approach
(e.g., cost, personnel, training, culture, technology, management commitment, etc.?)

Within your analysis on linear programming applied at Acme Mexico City, address the following:
What is your recommended low-cost (not necessarily the minimum cost) customer service employee daily assignment schedule?
 What are your underlying assumptions and any qualitative factors that you believe are involved?
 How might non-typical days affect the schedule?


Optionally, and for extra points to be determined by your section professor, provide a sensitivity analysis that shows how relaxation of the 50% constraint on the hours worked by part-time customer service employees might affect the daily personnel costs.
The following information is provided for your use in this linear programming analysis: To the extent permitted by local law, each Acme Home Improvements store, including Acme Mexico City, is open from 7 am - 11 pm every day.

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Acme Mexico City advance planners in North Carolina have provided the following table, which identifies the minimum number of customer service employees estimated to be needed on the floor of the store each hour of a typical work day:
Customer Service Employees
Time Period
Minimum number needed on the floor
7 am - 8 am
10
8 am - 9 am
12
9 am - 10 am
18
10 am - 11 am
22
11 am - 12 pm
22
12 pm - 1 pm
26
1 pm - 2 pm
26
2 pm - 3 pm
26
3 pm - 4 pm
26
4 pm - 5 pm
26
5 pm - 6 pm
28
6 pm - 7 pm
28
7 pm - 8 pm
24
8 pm - 9 pm
22
9 pm - 10 pm
14
10 pm - 11 pm
12
In the interest of cost control, the planners have also imposed a not-to-exceed maximum of 30 customer service employees on the floor at any time.
Full-time customer service employees at AMC work a 9 hour shift (8 hours of work plus a 1 hour meal break) either from 7 am to 4 pm or from 2 pm to 11 pm.
Workers on the 7-4 shift are assigned an hour-long lunch break at either 11 am or 12 noon. Workers on the 2-11 shift are assigned an hour-long dinner break at either 5 pm or 6 pm.
Part-time customer service employees work four consecutive hours per day and their shifts can start any hour between 7 am and 7 pm. They receive no meal breaks. By company policy, which is consistent with Mexican labor law, the company limits the hours worked by part-time customer service employees to 50% of the day's total scheduled hours.
Part-time customer service employees earn $500 per day, and full-time customer service employees earn $1100 per day in salary and benefits (here, $ = Moneda
Nacional, i.e., the Mexican peso).

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Acme operations analysts working in North Carolina, working with the AMC advance planners, have used linear programming to propose in accordance with the foregoing factors, an employee assignment schedule for a typical day. Their proposed schedule is the following item in Course Content. You may elect to recommend this schedule or to recommend one that is different.

Assignment 3. Team Assignment: Updating the Team
Work Plan - due in Week 5, and Planning/Assessing
Production for Toyota North America - due in Week 6

Lexus RX 350, Successor in 2007 to the RX 330 – Achieved top rating for reliability in Consumer Reports’ April 2015 Annual Auto Issue
Photo courtesy of Toyota Motor Company

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Overview
In this assignment, student teams prepare a report to demonstrate their acquired knowledge of the Toyota Production System and of Toyota Motor
Company's North American regional production strategy.
A real-world case study underpins one-half of the assignment.

Assignment
First, update your Team Work Plan due as specified in the LEO classroom.
Then address as a team the following four exercises also due as specified in the LEO classroom.
Exercise 1: Making a Critical Assessment of the Toyota Production System
(TPS) Today
a. Demonstrate your team's basic understanding of the TPS by
1) Defining in your team's own words any eight of the terms found at http://www.toyotageorgetown.com/terms.asp, and

2) Applying them to one or more of your team's own companies or other organizations. For example, Pokayoke is an approach to avoid production mistakes through use of devices or processes that detect or prevent errors. At a software development firm, pokayoke might be applied through use of a modular development process that includes extensive software module testing before proceeding to module integration and then total system testing

b. Describe the TPS as a total entity. What are its purposes? Its advantages?

Its limitations? How is it now evolving? Is it getting better or not? Has it been successfully copied by other motor vehicle manufacturers, fully or partially? Why or why not?
c. Include an executive summary.
Exercise 2: Use of a Grid Analysis (Weighted Scoring Model) to Help Make the North American Plant Location Decision for the RX 330
This exercise illustrates how when deciding among two or more competing plant location options, various decision factors (which can typically be characterized

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as exogenous - in the environment external to the company, hence largely outside its control - or endogenous - internal to the company, therefore largely under its control) can be qualitatively identified, and how these factors can then be weighted to obtain an overall score for each competing location option.
An example of an exogenous factor is regulations or laws established by the government where the company operates. An example of an endogenous factor is the wages the company elects to pay, where not constrained by law.
You will use grid analysis, another important tool employed by operations managers, to support your recommendation.
a. List the factors your team considers key to the Toyota Motor Manufacturing
Canada (TMMC): The Lexus RX 330 Line North American plant location decision, identifying these factors as either exogenous or endogenous, weighting them using your team's best judgment (stating any relevant assumptions or constraints), and assigning two scores to each factor: one for production of the Lexus RX 330 at TMMC, and one for production at a
Toyota factory in the USA.
b. Using the scores from your team's weighted scoring model and working with regard to Ringo Sho and Nemawashi, make and support your recommendation for the RX 330 North American plant location - TMMC or a factory in the USA.
c. Include an executive summary.
Exercise 3: Recommending Production Capacity Needed at Toyota Motor
Manufacturing of Canada (TMMC)
Decision trees are another important if challenging world-class operations management method which operations managers should understand and with which other managers should be familiar.
This exercise illustrates how through using a decision tree, determination of an
"optimal" production capacity option can be made from among several possible capacity options based on the provided probable market demand and expected costs/payoffs of events that influence the options.
Your team must recommend the production capacity needed at TMMC, after being presented with a decision tree-based solution prepared by the operations analysts (hypothetical) who are supporting the team.
It is spring 2000, and TMMC has indeed just been chosen to produce the new
Lexus RX 330 line, with the first units deliverable in 2003. Toyota must now determine the amount of annual production capacity it should build at TMMC.

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Toyota's goal is to maximize the profit from the RX 330 line over the five years from 2003-2007. These vehicles will sell for an average of $37,000 and incur a mean unit production cost of $28,000 (here, $ = the Canadian dollar).
10,000 units of annual production capacity can be built for $50M (M=million) with additional blocks of 5,000 units of annual capacity each costing $15M. Each block of 5,000 units of capacity will also cost $5M per year to maintain, even if the capacity is unused.
Assume that the number of units actually sold each year will be the lesser of the demand and the production capacity.
Marketing has provided three vehicle estimated demand scenarios with associated probabilities as follows:
Demand 2003
Low

2004

2005

2006

2007

Probability

10,000 10,500 11,000 11,500 12,000 0.25

Moderate 15,000 16,000 17,000 18,000 19,000 0.50
High

20,000 24,000 26,000 28,000 30,000 0.25

Here is the decision tree-based solution that the Acme North Carolina operations analysts (hypothetical) who are supporting the team have prepared:

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a. To maximize profit earned during this period, which annual production capacity will you recommend that TMMC in 2000 decides to build - 10,000,
15,000, 20,000, 25,000, or 30,000 cars? Justify your choice.
b. What are the weaknesses or limitations in this analysis? How might they be corrected or reduced?
c. It is now mid 2015. How well has the RX-330/350 actually done in the
North American market? Is its quality rated as high as a Lexus made in
Japan? Support your views.
d. Include an executive summary.

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Exercise 4: Assessment of Toyota's Current Regional Production Strategy

North America
(Canada, Mexico, USA)

Source: www.worldatlas.com/webimage/countrys/na.htm a. After doing necessary research online or otherwise, document and evaluate the current and planned distribution of Toyota production facilities in North America. Here be sure to include Mexico. THINK
CRITICALLY
b. Why does the team believe Toyota has chosen to produce its cars for the
North American market in the current manner? THINK CRITICALLY

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c. Recommend any changes that the team believes appropriate in the distribution of Toyota production facilities in North America.
d. Include an executive summary.
Besides an assessment of Toyota production in North America, this exercise provides the team an opportunity to think ahead to the international politicosocio-economic considerations that will be important in AMBA 660.
Your section professor may amplify your specific taskings in his or her instructions for this assignment.

Assignment 4. Discussion Activity in Teams:
Preparing an International Information Systems
Management Plan - due in Week 9
Overview
The section, working as a team under the leadership of a student Acme CIO and
Acme Assistant CIO, will demonstrate competency in information systems management by preparing a draft information systems management plan for the Acme Mexico City store.
The plan will be submitted in pdf format except for budgeting, which may be in xlsx format
The students will also prepare and present a 10-15 minute business-focused presentation of their plan. At their choice, the presentation may be made either online and live, or by video.
Critical thinking, managerial decision-making, cultural understanding, information literacy, problem solving, systems thinking, and technology fluency are required.

Assignment
The draft information systems management plan will include at least the following topics: 


An executive summary
Stakeholder groups

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







Objectives of the facility's information systems in terms of how they should support the needs of each stakeholder group
How the specific information requirements of each stakeholder group will be met by information systems proposed for the store including their hardware, software, procedures in use, security, and staffing.
Training needed by store staff
Maintenance of the systems
Anticipated future improvements to the systems
A planning budget

Your section professor may amplify your specific taskings in his or her instructions for this assignment.
Your section professor will function as Acme CEO. Your teaching assistant will serve as Acme COO. The student CIO reports directly to the CEO, while keeping the COO fully informed and soliciting guidance from both.

End

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