Operational capacity decisions are concerned with the long-term capability of an organisation to produce the required amount of output over time. You have been engaged as a consultant to constantly deal with issues surrounding stock and capacity related problems. Provide and explain any five (5) of the various strategies available in managing capacity.

Operational capacity decisions are concerned with the long-term capability of an organisation to produce the required amount of output over time. You have been engaged as a consultant to constantly deal with issues surrounding stock and capacity related problems. Provide and explain any five (5) of the various strategies available in managing capacity.

Purchasing and Supply Chain Management

6th Edition

ISBN:9781285869681

Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

Publisher:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson

ChapterC: Cases

Section: Chapter Questions

Problem 5.1SC: Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing...

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Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?
Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?
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Medaas Electronics is a fictional producer of laserprinters. The company's production planner, ChristianMedaas, has developed the following cost data (in U.S. dollars)CostsRegular $ 80.00 Per printerOvertime $ 120.00 Per printerSubcontracting $ 140.00 Per printerInventory Carrying Cost: $ 10.00 per printer per monthProduction CapacityMonths Demand Regular Overtime Subcontracting1 3000 2500 500 6002 3200 2700 500 6003 1800 1000 300 6004 2700 2000 500 6005 3400 2600 500 6006 2200 1700 500 600Total 16300Christian Medaas has 600 Printers in Stock at the beginning of the planning period. Develop a least-cost production plan.No backorders are permitted.
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Deforrest Marine Motors manufactures engines for the speedboat racing circuit. As part of their annual planning cycle, they forecasted demand for the next four quarters. The number of available days of production and the anticipated demand are given below. Employees Production Rate Production Cost Backorder Cost Overtime Cost Overtime Limit Demand Q1 2,400 6,019,000 They also estimated many of the costs required to conduct operations planning. Some of these key figures are listed below. 30 70 units/employee/quarter Q2 2,200 $1,000/unit $200/unit/quarter $1,500/unit <= 25% of Reg. Production Q3 1,700 Q4 1,800 Hire Cost Fire Cost Subcontracting Cost Subcontracting Limit Inventory Cost Initial Inventory $1,200/employee $800/employee $1,800/unit 400 units maximum $100/unit/quarter 280 units Deforrest Marine Motors wishes to maintain the current number of employees for the entire year to follow a level strategy balanced with inventory and backorders as needed. What is the total cost of this…