Operations Management

 Operations Supervision Essay

03-498 -89-1


In January 1989, Asim Noor, General Supervisor Saadia Going Mills (SRM), Badami Bagh, Lahore, Pakistan, was thinking about several recent developments inside the iron billet market. Asim was concerned because in its production of iron strengthening rods SRM used regarding 20 soucis of flat iron billets each month. Iron billets were being produced in only two locations in Pakistan, Lahore and Karachi. For several years SRM had bought iron effet from the supplier in Lahore. Purchases were made on a weekly basis, and the expediting and clerical expense per requisition were Rs1 50 and Rs thirty-three respectively. Expense of unloading the iron effet into SRM was Rs 8. 40 per charge 2 of iron billets. The space for storage for straightener billets for SRM was enough for 2 months require with extra leased storage place available at Rs 199. 20/tonne/year. A few weeks back, Asim had been informed by his purchasing agent that the community supplier got followed his Karachi rival in saying a new cost structure:

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US $ 1 ) 00 sama dengan Pak Rs 19. 1 . The six metre effet used by SRM weighed regarding 250 kg each.

The case was written by Research Connect, Arif My spouse and i Rana, within the supervision of Visiting Teacher James A Erskine, to serve as a basis for class discussion rather than to illustrate either successful or ineffective handling of the administrative scenario. Some information has been disguised for functions of privacy. This material really should not be quoted, photocopied or reproduced in any contact form without the preceding written consent of the Lahore University of Management Savoir.

© 1989 Lahore School of Supervision Sciences


Order (in tonnes) 1st 20 Subsequent 20 All over 40

Unit Price/tonne Rs 8, 300 Rs almost 8, 134 Rs 7, 885

SRM's local supplier had just increased its rolling mill ability and will now source iron billets only to a pick group of customers. SRM now had to cope with the Karachi supplier in whose prices were the same as the regional...