Saffron Retail: Orders Are Piling Up
Operations
medium35 min0 submissionsRazorpay
Scenario
Saffron Retail is a apparel retail operation in India. Demand is 1,398 units per day and rising, but the site is not shipping it. Work-in-progress is accumulating and the plant manager is asking for capital.
The line has four stages, each with its own maximum rate:
| Stage | Capacity |
|---|---|
| Intake | 1,848 units/day |
| Processing | 752 units/day |
| Quality check | 1,703 units/day |
| Dispatch | 1,313 units/day |
Other facts:
- The plant manager has requested ₹12 Cr to upgrade the Dispatch stage, because that is where the visible backlog sits
- Each additional unit shipped contributes ₹527
- Overtime is available at any stage, at a premium
The site director wants to know whether to approve the request.
Supporting data
proposal
- cost
- 12
- stage
- Dispatch
economics
- contribution per unit
- 527
derived hints
- bottleneck stage
- Processing
- system throughput
- 752
- unmet demand per day
- 646
demand units per day1398
stage capacity units per day
- intake
- 1848
- dispatch
- 1313
- processing
- 752
- quality check
- 1703
Your task
Advise the site director. Your answer should provide:
- Analysis — what the site's actual throughput is and where the constraint sits, computed.
- Risks — what your answer depends on.
- Recommendation — where to spend, and the throughput it should buy.
State any assumptions you make.
Ready to move forward? Up next: Cobalt Robotics: Orders Are Piling UpNext question
How you'll be graded
100 points, 60% to pass.
- root cause25
- recommendation20
- problem structuring25
- quantitative analysis30
Hint
Reveal suggested structure
Stage capacities; theory of constraints; value of relieving the bottleneck; re-check the next constraint