GSM 5113

OPERATION

MANAGEMENT

[RESTORATION PROJECT AT BENNETT AUTO SALES AND SERVICES - BASS]

Group 2

LECTURER:

ASSOC. PROFESSOR

DR. AZMAWANI ABD

RAHMAN

AZRIN SHAH BIN ISMAIL

PBS1211192

SHEIKH MUZAFAR SHAHRIZAN

PBS1311016

JOSEPH UKAU AK ENCHAN

PBS1311187

NAJIBUL NUGHIB OTHMAN

PBS1311170

AHMAD AFIQ BIN ABDUL GHAFAR

PBS1311165

Page | 2

Question 1: Report on the aspects of the proposed new business, such as the competitive priorities.

BASS’s intention to venture into car restoration business can be described as an extension of current services that the group of companies has been providing to their customers. David Bennet interested to venture into vintage car restoration aligned with his interest and passion with high performance car. Utilizing his current businesses and facilities, he will be able to execute most activities required for the car restoration project. He strategy is going to use this restored Shelby Mustang 1965 as an advertisement at Detroid Motor Show for BASS and his new business segment. However, David is unsure about his new ideas will aligned with his current company strategy. Thus he asked for a report from his Director of operation. This report included car restoration project for 1965 Shelby Mustang GT 350, the additional works are repair, order, installation and replacing parts and material such as upholstery, windshield, carburetor, and oil pump. David has limited budget for this restroration which are listed are below :-

1. $50,000 for the car ( already purchased) 2. $20,000 for restoration cost. 3. Expenses of $3,600 per week.

Restoration has to be completed within 45 days , this is to allow him to get his Mustang for Detroit Auto Show.

Bennet Auto Sales (BASS)

Owner : David Bennet

Car dealership Auto Parts store

and salvage yard

Bodywork and

painting workshop

- Providing consultation

service for customization of

refurbished cars.

- Executing physical

restoration of cars.

- Producing replica of parts

that are not available.

- Identifying and sourcing of

old parts that are required

for the restoration project.

- Database of parts

identification and supplier

for different type of

refurbished cars.

- Acquire new car restoration

projects.

- Purchasing used/ vintage

cars to be refurbished or

salvaged for parts.

- Sales and promotion of

restoration service.

Vintage Car

Restoration

- Basic restoration

- Customized restoration

- Parts library for DIY

- Replicate parts

- Quality Parts

Page | 3

To : David Bennet, Owner of Bennet Auto Sales and Services (BASS)

From : The Director of Service Operations

SUB : PROPOSAL ANALYSIS OF VINTAGE CAR RESTORATION BUSINESS.

Operation department

1. Service Design – BASS consists of 3 car dealerships that sell & services American

and Japanese model, 2 auto part stores, 1 body shop & painting business and 1 auto

salvage yard that designed to cater various type of customer in the automobile

business. It offers a line of supply chain business of automobile industry that can

gave good price to customer.

2. Flexibility – BASS respond to the customer wants and needs in restoring an old

cars. Mr. Bennett believes customer don’t have time to help themselves up in

restoring their vintage car. Hence, BASS will consider venturing in this new line of

business to cater 2 type of customer.

1st Type is find the right parts/customized parts for customer

2nd Do-it-yourself section that BASS play a facilitator role to assist customer to restore

their old cars.

Marketing department

1. Promotion – BASS willing to spend money to restore an old Mustang Shelby and

participate in the Detroit Auto Show within 45 Days. This action reflex on to inform

customer regarding a new line of business that BASS will venture in the near future.

To attract more vintage cars owner or collector, BASS decided to restore the Mustang

into a mint condition without customization. The idea was to show customer, BASS

have capabilities to gain original old parts for their cars and restore them as good as

new.

Target Market:

1. People who would like to do the restoration on their own and come to BASS for car

parts and body manuals, which BASS will eventually acquire for them.

2. People who come to BASS for the entire restoration of their vintage cars

The new business venture is a great way to make BASS as a one-stop shop for all car

enthusiasts’ needs. Not only that, with the knowledge and experience that BASS has in

the car business, if the new venture succeeds, than BASS could also be the market

leader for its industry. However, before making a commitment, this might also depend on

how well BASS is able to pull off the mint restoration of the Mustang. If they are able to

pull it off well, then they certainly have the skills and capabilities to enter into the

restoration market.

To conclude, the key competitive priorities of BASS for vintage restoration is highly

customized quality service to a low-volume demand environment.

Page | 4

Business Recommendation for Vintage Restroration

Refering to the Corporate Strategy for Vintage Restoration, its carrying a different

competitive priority which is for low demand environment with high quality product. As to

balance the constrains triangle, it will require longer period to produce the product. As

per this project, the constrains is the limitation of the resources. If BASS fully utilise all the

other resources for Car Restoration Project, it will jeopardize the rest of the business

segment.

It is not recommended for BASS to venture into Vintage Restoration as all the current

business model is quick respond for high volume demand.

Page | 5

Activity Activity description Immediate

Predecessor Activity Time Cost (($)

A Order all needed material and parts (upholstery, windshield, carburetor, and oil pump)

- 2 days $100

B Receive upholstery material for seat covers. A 30 days $2,100

C Receive winshield A 10 days $800

D Received carburetor and oil pump A 7 days $1,750

E Remove chrome from body - 1 day $200

F Remove body (doors, hood, trunk and fenders) from frame E 1 day $300

G Have fenders repaired by body shop F 4 days $1,000

H Repair doors, trunk, and hood. F 6 days $1,500

I Pull engine from chassis F 1 day $200

J Remove rust from frame I 3 days $900

K Regrind engine valves I 5 days $1,000

L Replace carburetor and oil pump I, D 1 day $200

M Rechrome the crome parts. E 3 days $210

N Reinstall engine K, L 1day $200

O Put doors, hood and trunk back on frame. H, J 1 days $240

P Rebuilt transmission and replace brakes. N, O 4 days $2,000

Q Replace windshield C 1 day $100

R Put fenders back on. G, P 1 days $100

S Paint car R, Q 4 days $1,700

T Reupholster interior of car B, S 7 days $2,400

U Put chrome parts back on S, M 1 day $100

V Pull car to Detroit Auto Show T, U 2 days $1,000

Page | 6

V

U

T

S

R

Q

O

N

M

L

K

J

I

H

G

F E

D

C

B

A

START

P

FINISH

Page | 7

Critical Path:

1. A + B + T + V = 2+30+7+2 = 41 Days

2. A + C + Q + S + T + V = 2+10+1+4+7+2 = 26 Days

3. A + C + Q + S + U + V =2+10+1+4+1+2 = 20 Days

4. A + S + L + N + P + R + S + U + V =2+7+1+1+4+1+4+1+2 = 23 Days

5. A + D + L + N + P + R + S + T + V =2+7+1+1+4+1+4+7+2 = 29 Days

6. E + M + U + V =1+3+1+2 = 7 Days

7. E + F + G + R + S + T + V =1+1+4+1+4+7+2 = 20 Days

8. E + F + G + R + S + U + V =1+1+4+1+4+1+2 = 14 Days

9. E + F + H + O + P + R + S + T + V =1+1+6+1+4+1+4+7+2 =27 Days

10. E + F + H + O + P + R + S + U + V =1+1+6+1+4+1+4+1+2 =21 Days

11. E + F + I + L + N + P + R + S + T + V =1+1+1+1+1+4+1+4+7+2 =23 Days

12. E + F + I + L + N + P + R + S + U + V =1+1+1+1+1+4+1+4+1+2 = 17 Days

13. E + F + I + L + N + O + R + S + T + V =1+1+1+5+1+4+1+4+7+2 = 27 Days

14. E + F + I + K + N + P + R + S + U + V =1+1+1+5+1+4+1+4+1+2 = 21 Days

15. E + F + I + J + O + P + R + S + T + V =1+1+1+3+1+4+1+4+7+2 = 25 Days

16. E + F + I + J + O + P + R + S + U + V = 1+1+1+3+1+4+1+4+1+2 = 19 Days

The critical path is A + B + T + V = 2 + 30 + 7 + 2 = 41 days

Page | 8

V

U

T

S

R

Q

O

N

M

L

K

J

I

H

G

F E

D

C

B

A

START

P

FINISH

0 2 2

0 2

2 32 30

2 32

2 12 10

17 27

2 9 7

14 21

0 1 1

14 15

1 2 1

15 16

2 3 1

16 17

2 8 6

16 22

2 6 4

23 27

1 4 3

35 38

3 6 5

19 22

3 8 5

17 22

9 10 1

21 22

10 11 1

22 23

12 13 1

27 28

32 39 7

32 39

39 41 2

39 41

15 19 4

28 32

11 15 4

23 27

15 16 1

27 28

19 20 1

38 39

8 9 1

22 23

ES t

EF

LS LF

Page | 9

Table 1 : Earliest and Latest activities time frame with slack.

Activity Time Earlier Latest Slack

LF - EF ES EF LS LF

A 2 0 2 0 2 0

B 30 2 32 2 32 0

C 10 2 12 17 27 15

D 7 2 9 14 21 12

E 1 0 1 14 15 14

F 1 1 2 15 16 14

G 4 2 6 23 27 21

H 6 2 8 16 22 14

I 1 2 3 16 17 14

J 3 3 6 19 22 16

K 5 3 8 17 22 14

L 1 9 10 21 22 12

M 3 1 4 35 38 34

N 1 10 11 22 23 12

O 1 8 9 22 23 14

P 4 11 18 23 27 12

Q 1 12 13 27 28 15

R 1 15 16 27 28 12

S 4 15 19 28 32 13

T 7 32 39 32 39 0

U 1 19 20 38 39 19

V 2 39 41 39 41 0

Page | 10

Question 4 : Project Budgeting

Table 2: Weekly budgeting and total cost estimation

Task $ Day $/day W1 W2 W3 W4 W5 W6 W7 W8 W9

Total Total Total Total Total Total Total Total Total

A

100 2 50

100

B

2,100 30

2100

C

800 10

800

D

1,750 7

1750

E

200 1 200

200

F

300 1 300

300

G

1,000 4 250

750 250

H

1,500 6 250

750 750

I

200 1 200

200

J

900 3 300

900

K

1,000 5 200

400 600

L

200 1 200

200

M

210 3 70

210

N

200 1 200

200

O

240 1 240

240

P

2,000 4 500

2000

Q

100 1 100

100

R

100 1 100

100

S

1,700 4 425

1700

T

2,400 7 343

1,028 1,372

U

100 1 100

100

V

1,000 2 500

500 500

Rework $

18,100

Weekly Cost ($)

2,910

4,690

3,100

1,900

-

3,128 1,872

500

Car $ 50,000

Total $

68,100

Note : Details as attached

Page | 11

Question 4: Project Budgeting

Table 3: Cost below $3600 for weekly budgeting and total cost estimation

Task $ Day $/day W1 W2 W3 W4 W5 W6 W7 W8 W9

Total Total Total Total Total Total Total Total Total

A

100 2 50

100

B

2,100 30

2100

C

800 10

800

D

1,750 7

1750

E

200 1 200

200

F

300 1 300

300

G

1,000 4 250

750 250 250

H

1,500 6 250

750 750

I

200 1 200

200

J

900 3 300

900 900

K

1,000 5 200

400 600

L

200 1 200

200

M

210 3 70

210

N

200 1 200

200

O

240 1 240

240

P

2,000 4 500

2000

Q

100 1 100

100

R

100 1 100

100

S

1,700 4 425

1700

T

2,400 7 343

1,028 1,372

U

100 1 100

100

V

1,000 2 500

500 500

Rework $

18,100

Weekly Cost ($)

2,910

3,540

3,100

3050

-

3,128 1,872

500

Car $ 50,000

Total $

68,100

Note : Details as attached

Page | 12

Summary for Restoration Project

Based on estimation in Table 1, the project can be completed within the budget

threshold of $70,000.

The weekly budget is below $3,600 over the period of 9 weeks, except for week 2,

whereby this project requires $4,690 due to big ticket items such as carburettor and

oil pump. In order to limit weekly expenditure, BASS will delay task G and J to Week

4. This will shift $1150 from week 2 and week 4 as table 2.

If problems exist, options that may be considered by BASS are as follows:

- Allow over time work during the weekdays or weekend;

- Outsourcing some of the jobs involve in the restoration such as body paint and

car delivery;

- Hire part-time skill workers on a project basis and

- Collaboration with the other local workshops.

Page | 13

Gantt Chart 1 : Tasks Duration.

0 5 10 15 20 25 30 35 40 45

Task A

Task B

Task C

Task D

Task E

Task F

Task G

Task H

Task I

Task J

Task K

Task L

Task M

Task N

Task O

Task P

Task Q

Task R

Task S

Task T

Task U

Task V

Duration

Page | 14

Chart 2 : Cost Distribution

0 5 10 15 20 25 30 35 40 45

$ Task A

$ Task B

$ Task C

$ Task D

$ Task E

$ Task F

$ Task G

$ Task H

$ Task I

$ Task J

$ Task K

$ Task L

$ Task M

$ Task N

$ Task O

$ Task P

$ Task Q

$ Task R

$ Task S

$ Task T

$ Task U

$ Task V

Cost $ x 100

Page | 15

Chart 3 : Gantt Chart Task and % Cost comparison

0 5 10 15 20 25 30 35 40 45 50 55 60 65

Task A

Task B

Task C

Task D

Task E

Task F

Task G

Task H

Task I

Task J

Task K

Task L

Task M

Task N

Task O

Task P

Task Q

Task R

Task S

Task T

Task U

Task V

Start

Duration

Cost $ x 100