EBK OM
6th Edition
ISBN: 9781305888210
Author: Collier
Publisher: YUZU
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Chapter 13, Problem 1DQ
Summary Introduction
Interpretation:
A good or service providing organization which make aggregate planning decisions.
Concept Introduction:
A good producing organization refers to the company which produce and manufacture product to fulfil the demand of the end consumer. A service-providing organization refers to the company which provide services to the end-consumer by satisfying the needs or want.
Expert Solution & Answer
Explanation of Solution
S is the company which manufactures stainless steel utensils and cutlery. They started their export with merchandise exporting and slowly they began to setup in-house manufacturing unit. The export takes place across different parts of the world majorly USA and Europe. S has a unique pricing strategy which revolves around 1%, 7% and 14% margin model. This means they operate at a very low margin which helps them to attract more customers. The promotion and advertisement is mainly through social media and cold emailing. There are fixed labours in the factory so hiring and firing does not take place and there are no subcontractors needed for the production. They hold inventory for just two to three days and then transport it to customer through sea shipment.
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Students have asked these similar questions
Why do operations planning require that a forecast be expressed in terms of physical units for an individual goods and services?
Given the following forecast and cost information,
determine the total cost of a plan that uses regular time
production output of 600 units per month, overtime is
used when needed up to a maximum of 60 units per
month, and subcontracting is used if additional units are needed to meet the forecast
Regular time cost
$ 40.00
per unit
Overtime cost
$ 60.00
per unit (60 max)
subcontracting cost
$ 80.00
per unit
holding cost
$ 10.00
per unit per month
month 1 forecast 563
month 2 forecast 608
month 3 forecast 648
month 4 forecast 668
month 5 forecast 666
month 6 forecast 688
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