Biz-Czar

Business Simulation – Round 3

Case Conceptualized and created by:

Hamir Chhetariya | Harsh Mehta | Jaydeep Thadeshwar | Rohit Bhura | Sandeep Kapasi
Team Biz-Czar, Perspective 2010, Institute of Management, Nirma University
BIZ-CZAR, Perspective-2010, Round 3

“Wonderland Shining…!!! The unemployment rate drops to 3% from 5%” – It was the headlines of the
daily news paper Business Wonderland. Wonderland has witnessed a significant surge in investment and
development in Information technology, Automobile Engineering and Pharmaceutical Industry since last
four years. Country has seen lot of economic development and the growth rate has been very
promising. The cumulative effect of the same was that unemployment rate had declined to the lowest
figure in the history of Wonderland.

When Bob Neerg went through this news over his coffee, he was not surprised because he had foreseen
it looking at the scale of investment entering the country. The only element of concern was that
unemployment figure had dropped much below his estimation. Such news generates pride for one’s
country but at the same time, it becomes a matter of concern from business point of view. Reflecting on
the news, Neerg decided to reschedule the meeting for human resource planning to an earlier date. He
messaged Mr. William Retaw to arrange the meeting by end of this week.

Retaw called up Mr. Vicky Naeco, the Chief Human Resource Manager, asking him to prepare the Labour
Planning Report by the end of the week. The objective behind preponing the meeting was that the
unemployment figure had dropped considerably, which in turn would lead to scarcity of skilled labor
resource in the market. Hence the Human Resource Department will have to act promptly and put
greater effort in acquiring the resources. Therefore, the early they start the better off they will be.

It was a periodic task for Mr. Vicky to plan for resources depending on the change in demand or any
other factor but there was one thing that always made him uncomfortable. i.e. The labour resource is
always considered in terms of numbers and he has to decide the number of employees to be hired and
fired based on their cost to company rather than on sentiments. He knew the practical limitation of a
large organization that acts looking at the ‘forest’ and not just the ‘trees' for the overall growth of the
company. But he always to manage the situation well. Whenever he used to lay off few resources, he
used to end it on a good note. And this was the reason that there were many cases where employees
did not feel uncomfortable joining back when needed by the organization.

After a week, Neerg, Retaw and Naeco met at the conference hall of the headquarters at Himalayas.
Labour resource planning was a routine task for Mr. Vicky but it was a complex process in its own terms.

“So Naeco, What is in for us?” asked Retaw, coming straight to the point, to Naeco.

“Sir, There are four assembly lines in the factory which manufactures 4 different components. One car
requires one unit of each component. Each assembly line requires unique kind of skills as far the human
labour is concerned. There is a pool of labour resource available which can be broadly categorized into
two: Single skilled and double-skilled. There are 4 categories of single-skilled labour that can work on
any one particular assembly line based on the skills possessed and 6 categories of labour that are
double-skilled and can work on any two particular assembly lines (obviously at different points of time)
based on their skills. The details of the categories and associated skill set are mentioned in the following
table” answered Naeco indicating to the report.

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 BIZ-CZAR, Perspective-2010, Round 3

Employee Hiring Cost Firing Cost Monthly Pay Assembly Assembly Assembly Assembly
Category (per labourer) (per labourer) (per labourer) Line 1 Line 2 Line 3 Line 4

Category 1 Yes - - -
Category 2 - Yes - -
14000 56000 24000
Category 3 - - Yes -
Category 4 - - - Yes
Category 5 Yes Yes - -
Category 6 Yes - Yes -
Category 7 Yes - - Yes
20000 80000 35000
Category 8 - Yes Yes -
Category 9 - Yes - Yes
Category 10 - - Yes Yes
All Costs are in Windis (WD)
No. of workers in a quarter are hired at the start of the quarter hence they are available from that same quarter till
they are fired. No. of workers fired are fired at the end of the quarter. For e.g. Workers fired in the quarter 2 have
worked for full second quarter and will not be working for quarter 3.

“Sir, the report containing the wages of the labour resource pool for 78 working days (per quarter) is
being consolidated and I’ll mail it to you as soon as it is ready. Moreover, each component requires
different lead time to get through the assembly line. Also, the lead time varies with number of labour on
the assembly line.” added Naeco

Assembly Line 1 Assembly Line 2

Labour Strength Lead Time per Labour Strength on Lead Time per
on Assembly Line Component Assembly Line Component
120 Workers 11.5 Mins 120 Workers 7 Mins
100 Workers 12 Mins 100 Workers 9 Mins
85 Workers 12.5 Mins 85 Workers 11 Mins
70 Workers 13 Mins 70 Workers 13 Mins

Assembly Line 3 Assembly Line 4

Labour Strength Lead Time per Labour Strength on Lead Time per
on Assembly Line Component Assembly Line Component
120 Workers 6 Mins 120 Workers 11 Mins
100 Workers 7 Mins 100 Workers 11.5 Mins
85 Workers 8 Mins 85 Workers 12 Mins
70 Workers 10 Mins 70 Workers 12.5 Mins
Each working day accounts for 8 hours of continuous production and the labour laws do not permit overtime for
labourers.

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BIZ-CZAR, Perspective-2010, Round 3

The important decision for Mr. Vicky Naeco will be to decide the number of resource to hire and fire
over the four quarters of 2012-2013 according to the estimated sales for the concerned year.

Estimated
2012-13 2013-14
Sales
Market Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
A 420 500 485 600 620 670 690 700
B 670 720 460 770 730 700 680 750
C 600 670 425 780 700 660 690 620
D 570 600 515 700 600 650 610 700
TOTAL 2260 2490 1885 2850 2650 2680 2670 2770
There is no provision for lost sales. Assume that the cost for not meeting the demand is extremely high. Demand
has to be fully met.

INSTRUCTIONS:

Neerg and Retaw, you need to plan the future Labour resource and make a decision with Naeco for the
human resource department.

An Excel sheet is provided to you, where in you need to fill in your decisions. All the data (tables)
presented in the attached Excel sheet for your assistance and reference.
Please make sure that the decisions that you enter are in the allocated cells ONLY. The data entered
anywhere else will not be considered for evaluation. You need to send back the filled up Excel sheet
before 7:00 PM, 12th February, 2010 at biz.czar.imnu@gmail.com.

The next and the last set of PDF and Excel sheet will be mailed to you by 9:00 PM on 12th February,
2010.

The Simulation PDF may be helpful as a reference for taking decisions for the next two days. So, please
save the PDFs.

Great going Neerg and Retaw!

All the Best Neerg and Retaw for your third year of operations!