mgt415a2

Note: The following problem is fictitious but employs names of, and news from, real organizations. The idea is to increase the reality of the situation, and to improve your awareness of various industries and organizations.

You have recently been hired by ILSCO Corporation, a Cincinnati-based manufacturer of mechanical and electrical connectors, as a quality engineer. Currently you are undergoing orientation which requires you to tour the ILSCO facility, meet key managers, and observe operations of the various groups.

Yesterday, you sat in on a monthly performance review meeting of the underground products group. Summary production reports were distributed showing columns of values for this month, the previous month, and the target. Table 1 shows some representative values from the report.

Table 1: Representative Values from Monthly Performance Report

	DEC 2006	NOV 2006	Target
Division operating hours (hrs)	486	512	500
Production (units)	12,321	21,597	21,000
Material costs ($)	11,088.90	19,437.30	18,900.00
Direct labor costs ($)	97,637.40	93,050.88	92,000.00

Almost immediately, the area production manager blurted out, "What the $&^% happened to unit production this month? Twelve thousand units on a target of nineteen five? You gotta be kidding me! Last month we did over 21,000. Somebody tell me what went wrong?"

And so began the inquest into the production shortfall. Department supervisors were hard pressed to come up an explanation why production was so low. The area production manager told all attendees to go back to their departments and find out what went wrong. A follow-up meeting was planned for the day after tommorow.

After the meeting, you went to the file cabinet to get some more historical data on monthly production volume. It appears in Table 2.

Table 2: Historical Underground Products Group Production

Month	Production Volume (units)	Month	Production Volume (units)
NOV05	13887	MAY	13482
DEC	15903	JUN	16142
JAN06	17002	JUL	17640
FEB	14729	AUG	20051
MAR	19125	SEP	14598
APR	11986	OCT	15472

Is last month's production the problem? Write a memo outlining your findings to the area production manager. A couple of things to keep in mind:

What principles of statistical thinking apply to this problem? If you can incorporate these thoughts and cite reputable sources in your report, then you will score points.
Remember that you are new. Position your message appropriately.
How can you demonstrate your message with data rather than mere opinion?
How should this situation be handled (think conservative next step)?
How might ILSCO be able to prevent similar situations in the future?

NOTE: Not sure, but you might find this little note useful.

ANOTHER NOTE: Depending on your approach to this problem, you may find this page of QC formulas and factors handy.

memo format sample memo tables graphs citations