Climate Control, Inc., makes expedition-quality rain gear for outdoor enthusiasts. Management prepared a forecast of sales (in
Question:
At present, finished goods inventory holds 24,000 suits. The demand forecast follows:
Use the Sales and Operations Planning with Spreadsheets Solver in OM Explorer or develop your own spreadsheet models to address the following questions.
a. Management is willing to authorize overtime in periods for which regular production and current levels of anticipation inventory do not satisfy demand. However, overtime must be strictly limited to no more than 20 percent of regular-time capacity. Management wants to avoid stock outs and backorders and is not willing to accept a plan that calls for shortages. Is it feasible to hold the workforce constant, assuming that overtime is only used in periods for which shortages would occur?
b. Assume that management is not willing to authorize any overtime. Instead, management is willing to negotiate with customers so that backorders may be used as a supply option. However, management is not willing to carry more than 5,000 suits from one month to the next in backorder. Is it feasible to hold the workforce constant, assuming that a maximum backorder of 5,000 suits may be maintained from month to month?
c. Assume management is willing to authorize the use of overtime over the next four months to build additional anticipation inventory. However, overtime must be strictly limited to no more than 20 percent of regular time capacity. Management wants to avoid stock outs and backorders and is not willing to accept a plan that calls for shortages. Is it feasible to hold the workforce constant, assuming that overtime is only used in months 1-4?
If not, in which months would additional overtime be required?
Step by Step Answer:
Operations Management Processes and Supply Chains
ISBN: 978-0133872132
11th edition
Authors: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman