Productivity

$$ Reduce set$-$up times.

Based on the new strategy, Peggy Knight developed the forecasted monthly sales and production plan shown in Exhibit $5-12.$ She wondered whether the shift in product mix, new pricing model, and forecasted productivity improvement in setup times would be sufficient to restore Sippican$$s historic margins. Sippican$$s machines were leased monthly and had staggered expiration times; Knight believed she could, on short notice, make $10\%$ to $15\%$ adjustments up or down to accommodate changes in demand for machine capacity. Also, Knight felt that she had some flexibility with the size and composition of the labor force as well. The company had recently hired quite a few production employees on short$-$term contracts to meet the expanded demand for the newly introduced flow controller line.