Develop a Chase production plan for Covolo Diving Gear. What are the advantages and disadvantages of this plan? Could Covolo implement a pure chase plan, given the current capacity? Why? If sales continue to grow, what are the implications for production capacity at Covolo?

Covolo Diving Gear, Part 2 June 15, 2020-Two weeks have passed since Covolo Diving Gear's contentious semiannual planning meeting, and the senior staff members for Covolo Diving Gear are getting ready to start their first monthly S&OP meeting. Gina Covolo, CEO, gets the ball rolling: I know it's been a busy two weeks for all of you, and I appreciate you working extra time to get ready for this meeting. Production is already set for the next two months, so we're going to start by planning for this September through the following August. I've had Patricia from marketing develop a sales forecast for these 12 months, and I've also had David from manufacturing estimate manufacturing costs and labor requirements, as well as capacity in the plant. Mary from HR was good enough to come up with some estimates of how much it costs to hire and train new workers, as well as the cost of laying off folks. Finally, Jack from supply management was able to get the accounting folks to estimate the cost of holding a gauge set in inventory for a month. So let's see what we've got. Mary passes out the following information to all of the attendees: MONTH SALES FORECAST MONTH SALES FORECAST September 2020 30,000 gauge sets October 31,500 November 35,000 December 37,000 January 2021 22,000 February 18,000 March 17,500 April 27,000 May 38,000 June 40,000 April 27,000 May 38,000 June 40,000 July 42,000 June 40,000 July 42,000 August 40,000 . . Manufacturing cost per gauge set: $74.50 Holding cost: $8 per gauge set per month Average labor hours required per gauge set: 0.25 hours Labor hours available per employee per month: 160 Plant capacity: 35,000 gauge sets per month Cost to hire and train a new employee: $1,250 Cost to lay off an employee: $500 Beginning and ending workforce: 50 Beginning inventory: 10,000