Concept explainers
Briefly discuss the advantages and disadvantages of each of these planning strategies:
a. Maintain a level rate of output and let inventories absorb fluctuations in demand.
b. Vary the size of the workforce to correspond to predicted changes in demand requirements.
c. Maintain a constant workforce size, but vary hours worked to correspond to predicted demand requirement;.
Want to see the full answer?
Check out a sample textbook solutionChapter 11 Solutions
EBK OPERATIONS MANAGEMENT
Additional Business Textbook Solutions
Operations Management: Processes and Supply Chains (12th Edition) (What's New in Operations Management)
Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
Business in Action (8th Edition)
Operations Management: Sustainability and Supply Chain Management (12th Edition)
Business in Action
Operations and Supply Chain Management 9th edition
- A company wants to develop a level production plan. The beginning inventory iszero. Demand for the next four periods is given in what follows.a. What production rate per period will give a zero inventory at the end of period 4?b. When and in what quantities will backorders occur?c. What level production rate per period will avoid backorders? What will be the ending inventory in period 4?arrow_forwardYou are responsible of developing the six-month aggregate production plan at Sodas Galore, a manufacturer of soft drinks. Your company makes three types of sodas: regular, diet and super-caffeinated. All three types are made using the same production process, and the switching costs can be ignored as they are so minimal. The S&OP team case created the following forecast of demand for the next six months. In addition to the sales forecast, the company has also developed planning values that are also shown in the next table. Month Sales Forecast (cases) Softdrinks Planning Values January 24,000 Current workforce 8 workers 32,000 Average monthly output per worker 32,000 Inventory holding cost 46,000 Regular wage rate February 4,000 cases per month $.30 per case per month $20.00 per hour March April May 60,000 Regular production hours/month 44,000 Overtime wage rate 160 hours June $30.00 per hour 240,000 Hiring cost $1,000 per worker $1.15 per case Total Subcontracting cost Firing/layoff…arrow_forwardCalculate budgeted unit production cost of comb.arrow_forward
- A landscaping company want to plan for the number of employees it needs to hire for upcoming year. In order to do planning it is good to know the demand for landscape for the previous years. The following table shows the demand for landscaping from 2019 to 2020. Help the company to forecast the demand for 2021. Period Demand Winter 2019 23 Spring 2019 1000 Summer 2019 1300 Fall 2019 200 Winter 2020 34 Spring 2020 1050 Summer 2020 1340 Fall 2020 330 show workarrow_forwardBudgeting for a Merchandising Firm Goldberg Company is a retail sporting goods store thatuses an accrual accounting system. Facts regarding its operations follow:∙ Sales are budgeted at $250,000 for December and $225,000 for January, terms 1/eom, n/60.∙ Collections are expected to be 50% in the month of sale and 48% in the month following the sale.Two percent of sales are expected to be uncollectible and recorded in an allowance account at theend of the month of sale. Bad debts expense is included as part of operating expenses.∙ Gross margin is 30% of gross sales.∙ All accounts receivable are from credit sales. Bad debts are written off against the allowanceaccount at the end of the month following the month of sale.∙ Goldberg desires to have 80% of the merchandise for the following month’s sales on hand at the endof each month. Payment for merchandise is made in the month following the month of purchase.∙ Other monthly operating expenses to be paid in cash total $25,000.∙ Annual…arrow_forward3. As manager of the St. Cloud Theater Company, you have decided that concession sales would support themselves. The following table provides the information you have been able to put together thus far: Item Softdrink Selling Price $1.00 Variable Cost $0.65 Percent of Revenue Wine Coffee 1.75 1.00 0.95 0.30 25 25 30 Candy 1.00 0.30 20 Last year's manager. Jim Freeland, has advised you to add 10% of variable cost as a waste allowance for all categories. You estimated labor cost to be $250.00 (5 booths with 2 people each). Even if nothing is sold, your labor cost will be $250.00, so you decide to consider this as fixed cost. Booth rental, which is a contractual cost of $50.00 for each booth per night, is also a fixed cost. a. What is the break-even volume per evening of performance? b. How mush would you expect to sell each evening at the break-even point?arrow_forward
- An aggregate planning model is being considered for the following applications.Suggest an aggregate measure of production and discuss the difficulties of applyingaggregate planning in each case.a. Planning for the size of the faculty in a university.b. Determining workforce requirements for a travel agency.c. Planning workforce and production levels in a fish-processing plant that producescanned sardines, anchovies, kippers, and smoked oysters.arrow_forward14.5. Mama's Stuffin' is a popular food item during the fall and winter months, but it is marginal in the spring and summer. Use the follow- ing demand forecasts and costs to determine which of the following production planning strategies is best for Mama's Stuffin': a. Level production over the 12 months. b. Produce to meet demand each month. Absorb variations in demand by changing the size of the workforce. c. Keep the workforce at its current level. Supplement with over- time and subcontracting as necessary. Month Demand Forecast March 2000 April 1000 1000 May June 1000 July 1000 1500 August September 2500 October 3000 November 9000 December 7000 January 4000 February 3000arrow_forward(2-b) A firm's demand in the next four quarters is forecast to be 400, 600, 800, and 700 units. Given that beginning inventory is 600, desired ending inventory in quarter 4 is 300, inventory holding cost is $6 per unit per quarter, and production cost is $50 per unit, calculate the cost of a level production plan.arrow_forward
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,