Salmones Puyuhuapi: Production Planning

Abstract

This case is appropriate for undergraduate, MBA, and MBAE audiences, but is specifically designed for Decision Analysis and Decision Analysis and Optimization, first-year MBA electives. It is related to but separable from "Salmones Puyuhuapi (A)" (UVA-QA-0749). That A case was about whether to harvest salmon early due to the threat of a virus, and it used a simple approximation for relating the value of a harvested salmon to its live weight. This production planning case addresses in detail how harvested salmon are processed and sold. Here, the plan Elisa Perez develops will determine how much value Salmones Puyuhuapi achieves from a day's harvest of salmon from one of the company's sites in southern Chile. Excerpt UVA-QA-0753 Rev. Apr. 7, 2014 Salmones Puyuhuapi: Production Planning Are you ready? The first boat with the harvest is on its way to the plant. Everything is set up to start processing in four hours, right? I just sent you an e-mail with the harvest specifications. Elisa Perez was at first surprised and then petrified when she received the phone call about the harvest's impending arrival. How could she have forgotten about this? She immediately remembered a previous discussion she had had with the CEO of the company, Osvaldo Correa. Correa's last words to her were “I'm going to give you one last chance. The next time, you are out.” As the commercial manager of Salmones Puyuhuapi (SP), Perez was in charge of developing production plans for SP's salmon processing plant. One of her main duties was to determine the best production mix based on each harvest's characteristics (number of salmon, average weight, weight dispersion, and quality), the processing plant capacities (the freezer tunnel was often a bottleneck), and market conditions (prices and customer requirements). . . .