CRU Computer Rentals Case Study

757 Words4 Pages
CRU is a national computer and its components rental company. They began their business in
1990, from this year they were growing rapidly, however, recently the general manager of the company,
Richard Sarkis reported that CRU has faced some unexpected financial problems. Despite of their significant competencies in their business area and appreciation from their customers who are large corporate clients, consulting firms, small business customers and participants in trade show; this unexpected financial problem need to be investigated. Since this unexpected problem are not allow
CRU to make profit like they had before.
Table 1 CRU Last Year Situation Analysis
Stage Throughput Rate
Inventory (units) Flow Time (weeks)
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• Weekly Profit = 34,530$/week (240,000-113,130-92,340)
Berkay Bademci CRU Computer Rentals Case Report
Civan Öcal
Suggested Key Performance Measures for Sarkis
-Flow time
-Cost Effectiveness
Suggestions for Sarkis to improve their process
1- It is obvious that in the business flow of CRU there is a non-value-added activity which is double checking of material defects. In the receiving department, there should be more accurate testing system that enables flow time to decrease and eliminates the checking for not defective stage. According to
Little’s Law theory to decrease inventory, CRU should decrease the flow time while keeping throughput rate stable.
2- The tendency to pick orders that are seemed easy, causes unfair shipment sequences of the orders.
Since, the processes are sequential, FIFO system should be applied. Despite of the success of CRU’s quick delivery and response time, continuity of this tendency is not fitting with CRU’s tradition and sustainability. 3- Passing shipping cost of receiving the used materials to the customers can enhance CRU’s revenue by
25*1,400 =
…show more content…
The average repairing fee which is 150$/unit can be portioned between CRU and the responsible customers. Every customer should be required to pay 40% of the repair cost. Average equation can be like: 150*40/100*1,400=
84,000$/week. This cost can be eliminated and foster the customers for using the materials responsibly.
5- For improving customer relations and intimacy, incentives can be applied. By checking customers’ past transactions, the ones who returned the materials properly and undamaged in a 5 times row will be rewarded with some discounts and privileges.
Berkay Bademci CRU Computer Rentals Case Report
Civan Öcal
Is “Every computer that is going through repair is currently generating a loss.” ?
It is obvious that repairing process causes some costs. They can be considered as sunk costs.

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