Case studies

The business-travel department of American Express is facing rapid growth in demand but is plagued with overstaffing in some offices because of the broad distribution of client demand. Management's challenge is to reduce costs in local offices while maintaining a high level of service. One alternative under consideration is a centralized regional business-travel center to handle reservation functions for up to 20 other Amexco offices. This case gives students the opportunity to apply queuing theory to a practical situation. Normally, in order to facilitate the numerous calculations required, it is used with the UVA “QUEUE” program.

This case explores the decision of a fast-growing company to expand its distribution network. Financial information is provided in it so students can understand the basic distribution network design covering inbound transportation, outbound transportation, distribution-center operations, and inventory.

This case is used in Darden's Supply-Chain Operations elective. The field-based case gives supply-chain educators the ability to teach the newsvendor model with pricing under a capacity constraint using real-life decisions. By 2005, Eastman Chemical Company, based in Tennessee, had created a new specialty plastic, Tritan, which demonstrated heat resistance and durability properties that might allow Eastman to compete in the lucrative polycarbonate plastics market. Development of this product was a major breakthrough for both Eastman and the broader chemical industry. The Eastman specialty plastics team had to contend with numerous challenges, however, before producing Tritan at full scale. First, Eastman had to commercialize a completely new material that only had been produced in the lab; second, the team had to develop a supply chain to manufacture a new component (monomer) and a new product (polymer) simultaneously; and finally, it had to analyze market entrance options given capacity constraints. Thus, the specialty plastics team faced several dilemmas: who should the initial launch partners be, given Eastman's limited manufacturing capacity, and how aggressively should Eastman price Tritan, given that price would drive demand in the launch markets and in new markets?

This case examines a set of expansion options for a successful Internet luggage retailer, with a particular emphasis on the operational complexities.

The consumer-products division of a multinational company is facing a decision on the sourcing of product components: whether to stay in Taiwan or switch to Mexico. See also the supplement to this case, “Cost Analysis for Sourcing Alternatives for Emerson Electric Company ACP Division” (OM-0823).

Supply chain network design choices and the challenges in implementing and understanding how alternatives influence firm performance are key management skills that can be applied to the case of a global company, Kulicke and Soffa Industries, Inc. (K&S), and its expansion strategy. Suitable for the MBA, EMBA, GMBA, and executive education programs, the case explores the decision to expand the company's tool bonding capacity in order to manage its growth. The question becomes whether to grow current operations in Yokneam Israel or seek alternative sites. And if it was decided to seek a location outside of Israel, where exactly should the company go?

This case requires a decision on the possible consolidation of three Midwest business-travel centers. Significant cost savings in service representatives can be achieved by combining the front-end (booking) operations. The sensitivity of cost to service-productivity levels and customer waiting time is also explored. This case and related materials can be used as part of the Workforce Planning Module.

This case is used in Darden's first-year core operations class as part of a module on supply chain management. The Musictoday company provided online retailing services for such clients as the Dave Matthews Band and the Rolling Stones. But the lack of a formal inventory-management process had Musictoday concerned about future stockouts that would result in lost sales. This case covers the basics of safety stock within the context of a periodic review system. It introduces students to the periodic review system and provides them with an opportunity to link the optimal review period with the EOQ concept.

Our Daily Bread was a small boutique bakery producing a variety of daily and specialty breads. The company had excess capacity and was considering several options to increase revenues by entering the wholesale bread production business. The case allows students to perform process analysis in a multiproduct setting with seasonal demand and evaluate the impact on capacity, as well as the profitability of, potential wholesale orders. The case also enables analysis of the option to purchase new equipment. A teaching note and video supplement (OM-1018V) are available to registered faculty. The videos highlight the stages in bread making and provide a bird's-eye view of the entire operation. VIEW DEMO

This case examines the opportunity for the Quaker-Tropicana-Gatorade (QTG) division of PepsiCo to invest in either or both of two small but fast-growing retail channels: the Dollar Channel and the Natural Foods Channel. The case gives an overview of PepsiCo's business strategy, focusing on health, wellness, and diversity and also provides a wide range of information. Students are challenged to take a broad, general management view in developing their recommendations.

Alan Silko must decide whether to invest in seven statistical-process-control (SPC) stations in order to increase his chances of becoming a “select supplier” for a large computer company. The student must do a discounted-cash-flow/decision-tree analysis of the option. The student is also given the opportunity to construct x-bar and range charts and to do an SPC analysis.

This case details the history of Southwest Airlines from its inception in 1971 until 2004. The case provides details of Southwest's business model and reasons for its success. It ends with a description of the company's competitive pressures in 2004. The case can be used for a course in service operations or strategy.

The airline passenger industry in India was a mess in 2013, but the low-cost carrier IndiGo was making money. This relatively new company had managed to work against the odds and grab market share from longer-established flyers. Still, the weak rupee, depreciated by 15%, was sending a chill wind through the aviation sector, and growth plans would have to include opening new destinations. This meant hiring more employees, opening more ticketing stations, and increasing costs. Could the airline continue its climb, or would it be prudent to prepare for a hard landing?

This disguised case examines the issue of outsourcing to a low-cost country based on a thorough analysis of competitive cost drivers. The case demonstrates that labor cost is only one potential advantage and that transportation cost and other factors could more than offset labor savings in some product lines.

A toy retailer plans to order a new product from an untested supplier for the winter holiday season. This exercise provides an opportunity for students to construct a model to determine optimal order quantity when demand is not known. Profits are calculated based on wholesale pricing, revenue-sharing, profit-sharing, and buyback contracts.

This case introduces a framework for cost modeling. Two data sets (one for injection-molded plastic parts and another for compressors) allow students to apply the cost-driver framework in conjunction with basic spreadsheet and regression analyses. Although obviously applicable in a course on supply chain management, the case can also be used to teach competitive cost analysis for strategic decision making.

The strategic and tactical problems of managing the operations function in a service environment can be examined through the context of the Walt Disney Company (DIS) opening Shanghai Disneyland. The company and its investors were excited about the Shanghai opening for a good reason: demographics. The resort would be located in the Pudong district of Shanghai, easily the wealthiest of all of China’s districts. A massive 330 million people lived with a three-hour driving radius of the resort site, compared with 19.6 million who lived within the same radius at DIS’s most profitable park, Walt Disney World in Orlando, Florida. Still, risks remained. Construction complications had delayed the opening almost a year longer than expected and cost overruns and alterations had increased the final price tag of the project. The Chinese economy had also hit a rough patch following the Chinese stock market slump in the summer of 2015. With the world watching, could the classic Disney theme park experience be delivered with the right cultural balance to appeal to its largely Chinese customers? Could DIS get it right?

Pancho’s Burritos is a high-end fast-food restaurant located in Charlottesville, Virginia. Due to a recent surge in customers, the lines at the restaurant during peak hours are becoming very long and causing excessive customer waiting. To improve current customer wait times and plan for future growth requirements, Francisco “Pancho” Escoba, the proprietor, wants to get a better understanding of the current operational capacity. The key decision Escoba must make is how to redesign his burrito-making process to increase the capacity and reduce customer wait time.

Suitable for an undergraduate or MBA course, the case can be used in an introductory operations course to teach capacity analysis and queuing. The case provides a relatable and understandable setting for students without an operations background to gain a better grasp of basic course concepts and illustrates how interactions between capacity and queuing affect one another. As an exam or review case it works well because it contains standard process calculations that all students should know how to perform.

In an effort to save his business, Paul Marciano, the owner of Italian family restaurant Maria’s Ristorante, runs a number of experiments focused on improving the customer experience around his target customer segment. These experiments lead to a better understanding about his business and cause him to make specific changes to his business model that ultimately improve things across the board. The experiments are based on research from the academic literature on the use of behavioral variables to manage customer perceptions.

This case examines the queueing issues caused by the growth in popularity of one of the most visited Hindu temples in the world. On January 2, 2015, Ramesh and Vasantha Gupta visit Tirumala Venkateswara Temple, just a day after some 210,000 people crowded the 2,000-year-old site. The case describes the many enhancements that the temple administrator, Tirumala Tirupati Devasthanams (TTD), has implemented since its management of the temple complex began in 1932. The soaring popularity of the temple, however, has led to safety and comfort concerns for pilgrims. While challenging students to consider additional improvements that might benefit pilgrim throughput rate and time in the temple system, the case highlights the tension TTD must manage between maximizing efficiency and maintaining religious traditions. Additionally, the case demonstrates the importance of perceived waiting times in the management of queues.

This case is an updated version of “Netflix Inc.: DVD Wars” (UVA-M-0763), and was written as a replacement for it.

A financial analyst is asked to appraise the value of Netflix’s stock at a time of unprecedented turmoil for the company. This case introduces customer lifetime value (CLV) as a useful metric for subscription-based businesses.

Microsoft employs 90,000 people and its products affect millions of users around the world every day. Developing the next version of Windows or Office is easy for Microsoft, but the company has struggled when it comes to more radical innovation. Intense competition from Google, Apple, and others threatens a business model that has delivered tremendous success over 25 years. This case highlights the strategic challenges facing Microsoft and provides insights into the organizational, leadership, and operational issues that must be addressed in order to define a successful innovation strategy at one of the world's most well-known companies.

This case presents the dilemma of a multinational oil and gas company, ExxonMobil, as it factors in the ethical issues related to the environment and cultural differences in deciding whether to proceed with building a pipeline in Chad and Cameroon, two of the poorest and most corrupt developing countries in West Africa. The many players in this project included the World Bank--which cofinanced the project and put restrictions into place that would hopefully prevent pipeline-related government corruption in both Chad and Cameroon--and many environmental and human rights groups that warned of potential disaster. The case also covers the environmental and social analysis of the areas that would be affected by the pipeline.