Two years ago, Johnny Chang's company, Realco, introduced a new breadmaker, which, due to its competitive pricing and features, was a big success across the United States. While de lighted to have the business, Johnny felt uneasy about the lack of formal planning surrounding the product. He found him self constantly wondering, "Do we have enough breadmakers to meet the orders we've already accepted? Even if we do, will we have enough to meet expected future demands? Should I be doing something right now to plan for all this?"
1. Develop a master production schedule for the bread maker. What do the projected ending inventory and available-to-promise numbers look like? Has Realco over promised? In your view, should Realco update either the forecast or the production numbers?
2. Comment on Jack's approach to order promising. What are the advantages? The disadvantages? How would formal master scheduling improve this process? What organizational changes would be required?
3. Following up on question 2, which do you think is worse: refusing a customer's order up front because you don't have the units available or accepting the order and then failing to deliver? What are the implications for master scheduling?
4. Suppose Realco produces 20,000 breadmakers every week rather than 40,000 every other week. According to the master schedule record, what impact would this have on average inventory levels?