Business Finance – Operations Management

Togo makes riding lawn mowers and tractors. The company’s expected quarterly demand is given below in the chart.  The company will have 300 mowers in inventory at the beginning of the month and desires to maintain at least that number at the end of each month.  Below is other critical data:

 

Production cost per unit = $225

Inventory Carrying cost per quarter per unit = $50 (based on ending inventory)

Hiring Cost per worker = $450

Firing cost per worker = $800

Beginning # of workers = 50

Each worker can produce 110 units per quarter

 

Complete the tables and calculate the cost of the two plans

 

LEVEL Plan

Quarter	Demand	Regular Production	Ending Inventory	Workers Required	Hire	Fire
1	5000
2	9000
3	7000
4	9000
Total	30,000

 

CHASE PLAN

Quarter	Demand	Regular Production	Ending Inventory	Workers Required	Hire	Fire
1	5000
2	9000
3	7000
4	9000
Total	30,000

 

Which plan do you recommend and why? 

Assignment 3 

Calculate the processing load, available capacity, and develop the load profile for the stereo speaker subassembly.  Two employees work the assembly process for 40 hours each.

 

1. Complete the load chart
2. Prepare a load profile chart from this data.
3. As the planner, what concerns do you have and what changes would you make if any?

 

	Part Name:  Stereo speaker
Processing Time = 20 minutes	Week	Week	Week	Week	Week	Week	Week	Week
	1	2	3	4	5	6	7	8
Planned Order Releases	220	190	210	270	210	190	240	200
Processing Load (hours)
Available Capacity (hours)