On May $6,2019,$ production of Parcel Guard had just started at the latest Danby Products Ltd$.($Danby$)$ facility, near Toronto, Canada. Although Julia Martinelli, vice$-$president of operations at Danby, was excited to see the new product being built, she also knew that demand would soon exceed capacity. Parcel Guard was one of the most anticipated new products Danby had produced in years, and if sales estimates were reliable, Martinelli needed to start thinking about how she could adjust capacity to keep up with future orders.

DANBY PRODUCTS LTD$.($DANBY$)$

Danby was founded more than $65$ years ago in Montreal, Quebec. From the beginning, Danby was dedicated to providing innovative compact appliances for the home$\mathrm{.}1$ Over the years, Danby had become an international success story, with sales in Canada, the United States, Mexico, and the United Kingdom. Most of Danby$$s refrigerators, freezers, microwaves, air conditioners, and other appliances were developed in Canada and produced through one of a number of supply partnerships overseas. With more than $2\mathrm{.}5$ million products sold every year, Danby was a leader in the compact appliances business$\mathrm{.}2$

PARCEL GUARD

Parcel Guard was developed in late $2018$ due to the growing demand for the home delivery of packages. The global courier, express, and parcel market was forecasted to grow from US$$94$ billion in $2017$ to CA$$126$ billion in $2022\mathrm{.}3$ Much of this growth was fuelled by online retailers shipping parcels directly to consumers. Online retail sales globally had already grown from $$1\mathrm{.}3$ trillion in $2014$ to $$2\mathrm{.}3$ trillion in $2017$ and were expected to double again by $2021\mathrm{.}4$ The aim of Parcel Guard was to address concerns plaguing the industry; Parcel Guard protected against issues such as weather damage, missed deliveries, damaged packages, and stolen parcels. The Wi$-$Fi$-$connected device fit most packages and included a motion$-$ activated camera, microphone, and built$-$in alarm and was assembled with industrial$-$grade plastic to protect against the elements $($see Exhibit $1).$ The Parcel Guard application allowed owners to track the status of packages and check the video feed, thus providing peace of mind$\mathrm{.}5$

Parcel Guard had received positive reviews from USA Today, TechCrunch, Twice, the Canadian Broadcasting Corporation, and the Global Television Network, and was voted by consumers as product of the year in $2019$ for home innovation. Retailers, home delivery services, and consumers were all eager for the arrival of Parcel Guard.

PRODUCTION

Danby elected to produce Parcel Guard in Canada, in partnership with a local supplier. Given the relatively simple assembly process and size of the product, it was determined that making the product locally would enable Danby to respond faster to changes in demand while keeping costs under control.

The new production facility for Parcel Guard was located inside the facility of the supplier of the cabinet, doors, and base for Parcel Guard. Located just east of Toronto, the supplier$$s facility was able to set aside enough space to meet the current demand and future growth. Fourteen people worked in the assembly facility for Danby: one supervisor, one material handler, and six people who worked on each of the two assembly lines $($see Exhibit $2).$

The first operator on each line assembled the cabinet and fused the parts of the cabinet together using an ultrasonic welder. One operator could assemble and weld nine cabinets per hour. The second operator assembled the door for Parcel Guard. The door featured a complicated design, and a skilled operator could complete one door sub$-$assembly in $6\mathrm{.}4$ minutes. The third operator installed the wiring harness and door sub$-$assembly. Installing both the wiring harness aThe fourth operator completed the wiring by connecting the power supply to the lock mechanism, siren, load cells, and main control panel. One operator could install the various electrical components and complete the wiring for $8\mathrm{.}5$ units in one hour. The fifth operator was responsible for the final inspection as well as testing the electrical functions of Parcel Guard. The inspection took no more than $90$ seconds, and the electrical test was automated through a dedicated software program designed to put Parcel Guard through a number of authentication procedures. The electrical test took a total of $15$ minutes, including the labour to initiate the test procedure and read the results. The technician could test three Parcel Guards at one time. The sixth and final operation was packaging. One operator took a total of five minutes to package one unit; it then took four minutes to stack six packaged Parcel Guards onto a pallet and prepare the pallet for shipping.

INCREASING CAPACITY

Martinelli was happy with how production staff was performing but knew that it would not be long before she would be expected to increase capacity. In anticipation of the growth in d