Case4 Kamm Industries YongchaoGao YuanCheng YiheWang
OMIS 2355 Case Study
Case 4 Kamm Industries
Reporter:
Yongchao Gao
Yuan Cheng
Yihe Wang 1
1. Introduction to the Case If your home or office is carpeted, there’s a good chance that carpet came from Dalton,
Georgia—also known as the “Carpet Capital of the World.” Manufacturers in the Dalton area produce more than 70% of the total output of the $9 billion worldwide carpet industry.
Competition in this industry is intense and forces producers to strive for maximum efficiency and economies of scale. It also forces producers to continually evaluate investments in new technology. Kamm Industries is one of the leading carpet producers in the Dalton area. Its owner, Geoff
Kamm, has asked for you assistance in planning the production schedule for the next quarter (13 weeks). The company has orders for 15 different types of carpet that the company can produce on two types of looms: Dobbie looms and Pantera looms. Pantera looms produce standard tufted carpeting. Dobbie looms can also produce standard tufted carpeting but also allow the incorporation of designs (such as flowers or corporate logos) into the carpeting. The following table summarizes the orders for each type of carpet that must be produced in the coming quarter along with their production rates and costs on each type of loom, and the cost of subcontracting each order. Note that the first 4 orders involved special production requirements that can only be achieved on a Dobbie loom or via subcontracting. Assume that any portion of an order may be subcontracted. Kamm currently owns and operates 15 Dobbie looms and 80 Pantera looms. To maximize efficiency and keep pace with demand, the company operates 24 hours a day, 7 days a
Case 4 Kamm Industries
Reporter:
Yongchao Gao
Yuan Cheng
Yihe Wang 1
1. Introduction to the Case If your home or office is carpeted, there’s a good chance that carpet came from Dalton,
Georgia—also known as the “Carpet Capital of the World.” Manufacturers in the Dalton area produce more than 70% of the total output of the $9 billion worldwide carpet industry.
Competition in this industry is intense and forces producers to strive for maximum efficiency and economies of scale. It also forces producers to continually evaluate investments in new technology. Kamm Industries is one of the leading carpet producers in the Dalton area. Its owner, Geoff
Kamm, has asked for you assistance in planning the production schedule for the next quarter (13 weeks). The company has orders for 15 different types of carpet that the company can produce on two types of looms: Dobbie looms and Pantera looms. Pantera looms produce standard tufted carpeting. Dobbie looms can also produce standard tufted carpeting but also allow the incorporation of designs (such as flowers or corporate logos) into the carpeting. The following table summarizes the orders for each type of carpet that must be produced in the coming quarter along with their production rates and costs on each type of loom, and the cost of subcontracting each order. Note that the first 4 orders involved special production requirements that can only be achieved on a Dobbie loom or via subcontracting. Assume that any portion of an order may be subcontracted. Kamm currently owns and operates 15 Dobbie looms and 80 Pantera looms. To maximize efficiency and keep pace with demand, the company operates 24 hours a day, 7 days a