Case: Sleepmore Mattress Manufacturing Plant Consolidation

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Executive summary

W.Carl Lebros the President of Sleep more manufacturing has been asked to study the consolidation of plant in three different locations and arrive at a decision regarding the consolidation of the plants. The major challenge perceived in the decision making process was to calculate the tradeoffs amongst the qualitative and quantitative attributes impacting the consolidation process and also to determine the sensitivity of the decision making process with respect to variation in weights assigned to the different attributes.

In order to address this issue we decided to use Analytical hierarchy process to structure the decision problem. The AHP was prepared on four quantitative metrics namely Annual savings, Plant size, and Initial cost and Space availability. These metrics were chosen since the ratings were not available for these metrics in the Exhibits and the other qualitative metrics were already rated and hence assigning weights for them would be a straightforward process.

The AHP on these four metrics with respect to three site locations helped in making structured a decision on the plant consolidation process in these three sites. Based on this a priority value was obtained for each of the three sites the consolidation of site1 had to give the highest priority. Also the sensitivity of the decision with respect to variations in weight.

Considering both qualitative and quantitative attributes and then performing AHP would have given better results and would have yielded in a more robust decision making process.

Statement of the problem

The president of a well-established manufacturer of mattresses has asked his assistant to recommend whether to consolidate plants at three different locations. He must decide not only which criteria are most useful in making such a decision, but also how to weigh the different criteria in coming up with a single decision

Lebros had to come up with an effective way to combine both the quantitative and qualitative factors to make decisions on plant consolidation and also to determine how sensitive the decision would be changes in Weight.

Background

The background for the study was established through analyzing the various exhibits given in the case tagged with understanding gained from the team discussions and facts mentioned about the proposal and its pros and cons. The required concepts were gathered from the classroom slides and notes and refreshed thoroughly.

We have gone through the history of Sleep more Mattress Manufacturing and studied the literature on AHP and additive utility. Group discussions were very helpful in discussing about the various attributes and how the weights could be assigned for various projects and give meaningful recommendations.