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CRU Computer Rental PowerPoint Presentation
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CRU Computer Rental

CRU Computer Rental

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CRU Computer Rental

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    1. 1 CRU Computer Rental A case on Flowtime, Inventory, Thruput and Process costs

    2. 2 CRU case What does CRU stand for anyway? CRU is a computer rental company with a customer base of ? ? ? CRU has two warehouses (Mega Centers) at ? and ? It has ? local retail centers.

    3. 3 What is Mr. Sarkis’ Problem?

    4. 4 To understand the CRU operations Make a flowchart

    5. 5 Flowchart with operations

    6. 6 Flowchart with operations

    7. 7 Flowchart with operations and inventories

    8. 8 Add flow times and costs appropriately to inventories and delays Flowchart with operations and inventories

    9. 9 Utilization in 1996 Utilization=Inventory on rent / Inventory owned Number of computers on rent at any time ???? x ???? = ???? Number of computers owned by CRU? Can use Little’s formula Inventory = Thruput x Flowtime

    10. 10 Inventory in 1996: Completed

    11. 11 Compute the profit per week in 1996 Revenue=Inventory on Rent x Rent per unit per week ????*????=???? Cost=Ship+Receive+Pre-Config+Repair+Depreciate Ship+Receive=???? Pre-Config=???? Repair=???? Depreciation=???? Cost=???? Profit=????

    12. 12 Inventory in 1997: Flowtimes and Thruputs

    13. 13 Compute the profit per week in 1997 Revenue=Inventory on Rent x Rent per unit per week ????*????=???? Cost=Ship+Receive+Pre-Config+Repair+Depreciate Ship+Receive=???? Pre-Config=???? Repair=???? Depreciation=???? Cost=???? Profit=????

    14. 14 Short term sales initiative in 1997 Every week, ??? units rented for ? weeks ??? units rented for ? weeks Each unit rented for ? weeks, Brings in a revenue of $??/week Each unit rented for ? weeks Brings in a revenue of $??/week Note the discounting for the longer term rentals What is the average number of weeks a computer stays with a customer? 6 or 8 weeks or something else?

    15. 15 Inventory in 1997 with Short term sales initiative: Flowtimes and Thruputs

    16. 16 Compute the profit per week in 1997 with the Short term sales initiative Revenue=Inventory on Rent x Rent per unit per week ????*????=???? Cost=Ship+Receive+Pre-Config+Repair+Depreciate Ship+Receive=???? Pre-Config=???? Repair=???? Depreciation=???? Cost=???? Profit=????

    17. 17 Suggestions ??? ???

    18. 18 What is the fundamental problem with the computer rental business?

    19. 19 Do you see the same fundamental problem in the industries below? Movie rental Fridge rental Furniture rental Car rental Apartment rental