Question
Using the sample data given in Table 2-20, make a recommendation for how many units of each style Wally should make during the initial phase of production. Assume that all of the 10 styles in the sample problem are made in Hong Kong and that Wally’s initial production commitment must be at least 10,000 units. Ignore price differences among styles in your initial analysis.
Answer
During the speculative production phase, it is better to under-produce all styles since Obermeyer still has a second production opportunity. The recommended numbers of units to produce for each style in Hong Kong are listed in the table below.
Style Average forecast, µ 2 x Standard deviation, 2σ First period production quantity, µ-2σ Hong Kong
Gail 1017 388 629 629
Isis 1042 646 396 600
Entice 1358 496 862 862
Assault 2525 680 1845 1845
Teri 1100 762 338 600
Electra 2150 807 1343 1343
Stephanie 1113 1048 65 600
Seduced 4017 1113 2904 2904
Anita 3296 2094 1202 1202
Daphne 2383 1394 989 989
Total 20001 NA 10573 11574
2
Question
What operational changes would you recommend to Wally to improve performance?
Answer
Key problems:
1. Short life cycle products with short selling season
2. Long manufacturing lead time from planning to production
3. Highly uncertain demand
Operational changes:
1. Cut down on number of styles and forecast customer demand for each style
2. Develop promotion schemes to encourage retailers to order more
3. Improve the China workers’ level of
Compute the projected profit for the order quantities suggested by the management team under three scenarios: worst case in which sales = 10,000 units, most likely case in which sales = 20,000 units, and best case in which sales = 30,000 units.
11. Prepare a table that illustrates the percentage change in costs between the volume-based system and the strategic activity-based system.
Explain what should be considered when selecting a production method to suit a given product
Wally had been identified as a student with Emotional Behavior Disorders (EBD) upon enrolling to kindergarten. He has attended 7 schools throughout his educational career due to his behavioral issues as well as his family moving. During this time frame various strategies have been implemented to determine the most appropriate learning environment for Wally.
Management should note that the level of activity was above what had been planned for the month. This led to an expected increase in profits of $1,100. However, the individual items on the report should not receive much management attention. The favorable variance for revenue and the unfavorable variances for expenses are entirely caused by the increase in activity.
B. 1. The impact of costs on the decision to move forward with the new Maui Sandal line is as follows: As the production continues, the hours needed for each batch, or individual pair, will begin to decrease. By continuing to produce this line the total labor costs will continue to decrease, but most likely, at a slower rate as more sandals are produced. This data can help the company decide employment levels, capacity, costs, and their pricing of this particular merchandise in the open market. The company predicts that it will take 1,000 labor hours for production to complete for the first batch, with 50 total batches between month 1 and month 4.
The case involves the decision to locate a new store at one of two candidate sites. The decision will be based on estimates of sales potential, and for this purpose, you will need to develop a multiple regression model to predict sales. Specific case questions are given in the textbook, and the necessary data is in the file named pamsue.xls.
Select an existing production organization. Analyze the organization’s current vision, mission, business strategy, operation strategy, supply chain, total quality management, just-in-time philosophy, forecasting method, statistical technique, facility location, work design, project life cycle, and project management. Note: You will need this information in order to complete this and subsequent assignments.
We have data out of 250 stores. The data include demographics, economics, sales of the stores, compositions of those sales as well as sales behavior per households. There are 31 variables being consider for each store and those variables range from sales,
* The variances are due to the Mile High Cycle company not forecasting for increased production. The company budgeted for the production of 10,000 cycles but the actual production was 10,800 units. When the company increased production, the production efficiency decreased. The company had to use or rework parts that added extra cost to the expenses; the reworked parts added $25,000 of extra expenses to the wheel assembly production and $45,000 to the final assembly process. The material,
AJ DAVIS is a department store chain, which has many credit customers. A sample of 50 credit customers is selected with data collected on location, income, credit balance, number of people and years lived in the house
The new owner of a beauty shop is trying to decide whether to hire one, two, or three beauticians. She estimates that profits next year (in thousands of dollars) will vary with demand for her services and has estimated demand in three categories low, medium and high.
A. The simulated function given in the Excel spreadsheet “Hamptonshire Express: Problem_#1” allows the user to find the optimal quantity of newspapers to be stocked at the newly formed Hamptonshire Express Daily Newspaper. Anna Sheen estimated the daily demand of newspapers to be on a normal standard distribution; stating that daily demand will have a mean of 500 newspapers per day with a standard deviation of 100 newspapers per day. Using the function provided, the optimal stocking quantity, which maximizes expected profit, is determined to be approximately 584 newspapers. If 584 newspapers were to be ordered, Hamptonshire Express will net an
Is there a way to estimate the cost of services and product to customers such that Stuart’s Branded Foods can be competitive in their market? Use the illustrations of the two customers to demonstrate your approach. What would be the selling price per kit or per cup for each customer?
Monmouth Inc. is a leading producer of engines and massive compressors used to force natural gas through pipelines and oil out of wells. It is has dependence on sales to the oil and gas industries, the earnings of which is fluctuated owing to cyclical nature of heavy machinery and equipment sales. Anyway, the company’s amount of earnings growth and sales are above average in long-term view. From the last three acquisitions the company adhered to only leading companies in their respective market segments. The fourth company on the list of acquisition was Robertson Tool Company.