Operations Management Case Study: Scotsburn Creamery

INTRODUCTION

Scotsburn Creamery was established by a small group of local farmers in the village of Scotsburn, Nova Scotia, on April 12, 1990. They decided to establish a creamery to manufacture dairy products, such as butter from their supply of milk. Now, Scotsburn Creamery has been the largest Atlantic Canadian dairy producer. Its line of products includes milk, butter, cottage cheese, sour cream, and frozen dairy desserts. In addition, they also include drinks and water. In recent years, Scotsburn has become one of Canada’s largest ice cream producers; some of which are produced under private label for major retail customers. These products are distributed to west of Atlantic Canada and throughout the world.

This paper discussed about the

The constraints from the monthly model is to minimize the inventory carrying costs and production setup costs, then the weekly model use production grouping to reach the goals. In the case of Scotsburn Creamery, they produce the ice cream with the same base mix or similar packaging to reduce changeover and eventually the setup cost. The output of the model is cost-effective production schedule for only a week, which consider the production and inventory plan from the monthly model to maintain the integration between

Souder had come up with several criteria which represents a good management science models. The result of the research was there are five criteria and their characteristics to include as a good management science model. Those are realism criterion (accuracy of the model to represent reality), capability criterion (refers to the ability of the model to perform different types of analysis), flexibility criterion (refers to the diversification of applications of the model), use criterion (refers to the degree of difficulty to use the model), and cost criterion (refers to the expense of setting up and using the model).

Researches has always been an ongoing process and lead on to a new and more reliable models. Laibson and Gabaix (2008) found out that many successful economic models have several of the seven properties they define. The seven properties are:

1. Parsimony

A parsimonious model is a simple model which rely on several specific assumptions which provides little degree of freedom to the researchers. The purpose of this characteristics is to prevent the researchers to manipulate the model so that it would work well in the situation. If such manipulation occurs, there will be over-fitting model which cannot work in out-of-sample condition. This property is supported with the study from Mader et al. (2008) which state that truthfulness prevent the researchers to simplify model which can result a different behavior than the original system.

2. Tractability