Buckeye Auto is a thriving, independently owned and operated firm located in Wes
ID: 368185 • Letter: B
Question
Buckeye Auto is a thriving, independently owned and operated firm located in Westerville. It was founded in 1986 by “Buckeye” Cooper. Buckeye was born and raised in Westerville, OH. Buckeye is well-known and trusted by the residents of the town. As a teenager, he was a star football player for the high school team. In his spare time, he enjoyed working on cars and had a special talent when it came to cars. After college, this hobby led Buckeye to start his own business – Buckeye Auto Tire and Lube. Buckeye does a wide variety of work on vehicles of all makes and models. The shop also offers a variety of parts and supplies at retail. Buckeye spends a great deal of time conversing with customers, most of whom he has known his whole life. His reputation for honest and reliable work has earned him many repeat customers, with the positive word of mouth helping him to expand his business.His wife, Diane, runs the office, and takes special care to acknowledge customers on their birthdays with hand-written cards that include coupons for discounted services. Customers often reflect that Buckeye offers the kind of service you can only find from a small-town mechanic. While Buckeye is slightly more expensive than the chain establishments that have recently moved into town, customers testify that the friendly environment and quality service are worth the price. Operational detailsBuckeye’s shop has grown steadily over the years. Originally, Buckeye maintained a modest three automobile bays at his shop, and he and his long-time buddy, Fred, conducted most of the work except oil changes which were handled by a part-time apprentice. Currently, Buckeye shop has six bays (the layout of the shop is shown in Figure 1) and seven mechanics (as not all of the service activities require a bay). Each of the bays is identical so that any employee can work at any station.Four of the employees (including Buckeye and Fred) are full-time (work at least 40 hours per week), and three are interns who work part-time (work fewer than 40 hours per week). Buckeye and Fred are the only two mechanics permitted to do work beyond the basics, and so more involved car services can take some time getting through the shop. Most mechanics at Buckeye Auto were trained at the area vocational school, and those with particular skill are taken on as apprentices who work under Fred and Buckeye on the more involved projects. Cooper provides all the tooling necessary, and is respected as a fair and caring boss. In return, Buckeye’ employees are loyal and hard-workers; seldom is absenteeism a problem, and turnover is rare.
Page 2 of 5The employee schedule for a typical week is shown in Table 1. The numbers shown in Table 1 are all devoted to working on vehicles. The shop closes for one week in the winter. InventoryAlthough the shop is primarily a service provider, all of the services require materials in addition to labor, and so there are inventory considerations that Buckeye must manage. A variety of other parts and supplies (for example, oil filters and oil) must be kept available due to the regularity of use; it would be difficult to meet the high expectations of customers if these items are not available. This has become a particularly high priority ever since national service chains moved into town, as the speed of their services such as oil changes is already far superior to that of Buckeye. As a result of these competitive pressures, Buckeye sets a 98% target service level.Buckeye is dedicated to using a high-quality brand of parts and supplies, most of which are available from a single supplier. Note that these parts and supplies are not only used to support services but also sold as retail transactions to customers who wish to perform their own repair work.Currently, a continuous review policy is used for all car parts and supplies, but Buckeye believes this system may require too much time to maintain for all inventory items. A sample of some of the items offered, the volumes used in services and sold at retail, and the associated costs are shown in Table 2. Buckeye has determined that to call the supplier, pay for transportation, and put a shipment away costs approximately $50. The stockroom is relatively small and does not require special equipment or personnel. There is virtually no theft of product, so the annual holding costs are approximately 25% of unit cost. Delivery of orders takes about one week from the local supplier
Q:Identify or describe the following;
a. What is the Process Choice for the business?
b. Identify the elements of the Service Package.
c. What Activity(ies) take place ABOVE the
line of visibility
in any flow
diagram of the facility
Table 1: Operating Hours and Mechanic Work Schedule
Day*
Available Shop
Hours by Day
Mechanic Work Schedule
Total Work Hours by Day
Full-Time
Part-Time
1
2
3
4
5
6
7
Monday
10
10
10
10
10
8
8
8
64
Tuesday
8
-
8
8
4
4
4
4
32
Wednesday
10
10
10
-
10
-
4
4
38
Thursday
8
8
-
8
8
4
-
-
28
Friday
10
10
10
10
10
10
10
10
70
Saturday
6
6
6
6
-
-
-
-
18
* The shop is closed for business on Sunday.
Day*
Available Shop
Hours by Day
Mechanic Work Schedule
Total Work Hours by Day
Full-Time
Part-Time
1
2
3
4
5
6
7
Monday
10
10
10
10
10
8
8
8
64
Tuesday
8
-
8
8
4
4
4
4
32
Wednesday
10
10
10
-
10
-
4
4
38
Thursday
8
8
-
8
8
4
-
-
28
Friday
10
10
10
10
10
10
10
10
70
Saturday
6
6
6
6
-
-
-
-
18
Explanation / Answer
While ending inveontory using absorption costing, fixed and variable manufacturing costs will be considered using marginal (variable) costing, variable costs (including non-manufacturing costs) will be considered.
If inventory increases using absorption costing, profit will be increased.
The positive elements of recruitment and selection process are as follows:
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