Thickedwood Case

Thicketwood Ltd. Case

Main products of Thicketwood Ltd are custom made, high quality kitchen cabinets and modules. Products are handmade.

Product attributes are;

Handmade, significant labor cost and inconsistent quality.

High-end, addressed to high-income families who wanted unique cabinets to enhance the appearance of their kitchen.

Expensive, sold between 5000usd to 10000usd.

Process type of Thicketwood Ltd. is best defined by Job Shop since materials travel 5 steps/stations to become custom made cabinets. All of these stations have their own specialty and skilled workers who does the same operation all day long like drilling, cutting and routing.

Job shop manufacturing style is appropriate for this production type because job shop lets producers to be flexible on their products. In this case customization is a key attribute. Also production quantities are suitable, 2000 cabinets per year can be considered as a low demand. High expenses of job shop can be tolerated with high prices (5000 to 10000 usd).

Summary Thicketwood Ltd is a custom kitchen cabinet manufacture in Kitchener, Ontario. Its operations manager, Mark Taylor was thinking how to improve the efficiency and cost-effectiveness of Thicketwood¡¦s production line. There are two decisions should be made by Mark Taylor. The first is whether to purchase the CNC router; the second is if purchasing, which should be brought, the new one or the old one? In the first decision, quantitative criteria include: ƒÜ Depreciation cost of CNC router each year ƒÜ Saving of the labor cost ƒÜ Cost of additional maintenance beyond the annual estimated regular maintenance costs projected for the router. Qualitative criteria include: ƒÜ Warranty time ƒÜ Relationship with the partner ƒÜ Service offering Base on score judgment system created in terms of qualitative and quantitative criteria, we get the total score of new CNC router is 9.2 while the not purchasing is 7.8.