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140601444 Manzana Case Solution 105 109 Essay

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Manzana Case Study
Submitted By: Bhaskar Jain (105), Abhimanyu Maheshwari (109), Prannoy Pillai (114), Pranjal Saiwal (115)
Question and Answers

(1) What are the problems that the Friutvale Branch is facing? What are the causes of these problems?
Answer: Problems faced and the causes for these problems:
Problems faced:
 Improper scheduling of work resulting in tighter schedules or idle time.  Decline in profits – the Fruitvale branch reported a loss of $ 174,000 & $ 121,000 during the first quarters of 1991.
 High interest rates and competition by Golden gate casualty.  High Turn Around Time (TAT) – TAT announced by Golden Gate was less (2 days) compared to Fruitvale (5 days).
 Renewal Loss Rate of Fruitvale went up to 33% as compared to 15% of Golden Gate.
 Rising level of settlements on liabilities were unprofitable.  Brand profit declined and backlog of policies.
Causes for these problems:
 Improper utilization of resources:
The uneven pattern of work given to the underwriters, overstaffed in rating and policy writing. Sometimes one team is stretched to work and the other team is idle. According to the status given, there is vast difference between the average working hours and the capacity available (Capacity available being higher than the average working hours).

 Method prioritization:
Although the company policy was to use FIFO, but in practise it was found that RUNs and RAPs were given priority over the RAINs and RERUNs. This resulted in backlog of RERUNs as the emphasis was laid o...

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