please help with question 3

Covolo Diving Gear, Part 2 June 15, 2020-Two wecks 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 mecting. Gina Covolo, CEO, gets the ball rolling: I know it's boen a busy tao mecks for atl of you, and I appeciate you working extad time to get rady for this mecting Production is alrady set for the noxt two months, so we he going to start by plannitg for this September tirough the following August, IVe had Patrida from marketing devilop a sales forecast for these 12 months, and Ive also had Davi from manufacturing estimate manufacturing costs and labor mequirenents, as will as capacity in the plant. Mary from HR was good enough to come up with some estimates of how mudh it costs to hire and nain new workers, as well as the cost of laying off folls. Finally. Jack from supply management was able to get the accounting folks to estimate the oost of holding a gauge set in inventory for a month. So let's see what weve got. Mary passes out the following information to all of the attendees: - Manufacturing cost per gauge seti \$74.50 - Holding costi $8 per gauge set per month - Average labor hours required per gauge sets 0.25 houn - Labor hours avaliable per employee per monthe 160 - Plant capacity: 35,000 gage 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 Questions 1. Develop a level production plan for Covolo Diving Gear. What are the advantages and disadvantages of this plan? Could Covolo implement a pure chase plan, given the 330 PART IV - PLANNING AND CONTROULNG OPERATIONS AND SUPPLY CHAINS current capacity? Why? If sales continue to grow, what are the implications for production capacity at Covolo? 2. Patricia Rodriguez, vice president of marketing, states. N've got to tell you all that Im pretty comfortable with the forecasts for September through November, but after that, a lot could change. It's just very hard to forecast for four or more months our in this kind of market. "How will a monthly S\&OP update with rolling planning horizons help alleviate Patricia's concerns? Are there still advantages to S\&OP, even though the forecasts may change? 3. After looking over the level production plan, David Griffin, vice president of manufacturing. speaks up: "This looks OK, but you know what bugs me about it? The assumption that if a worker is available, that worker has to be making gauge sets, even if we don't need any more. It might make sense in some cases to fust have the worker not produce rather than lay off a worker in one month and hire someone else back the next." Do you agree? What are the holding costs associated with having an extra worker produce gauge sets for one month? How do these compare to the layoff and hiring costs? How might a strategy of keeping extra workers idle affect the estimated manufacturing costs for the gauge sets? (Hint: Labor costs have to be accounted for somewhere.)