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Togo manufactures riding lawn mowers and tractors. The company has provided expected quarterly demand figures and other relevant data such as production costs, inventory costs, hiring and firing costs, and workforce information. The firm starts with an inventory of 300 units and aims to maintain at least this level at the end of each month. Using this data, you are asked to develop and compare two production planning strategies: the Level Production Plan and the Chase Demand Plan. For each plan, you will fill out detailed tables that include quarterly demand, regular production, ending inventory levels, number of workers required, hires, and fires, as well as the associated costs. Based on the analysis, you will recommend the most suitable plan and justify your choice.

Assignment 3 involves calculating production load, capacity, and creating load profiles for a stereo speaker subassembly process. The scenario includes analyzing weekly processing times and planned order releases to assess if the current workforce can meet production demands efficiently, identifying any bottlenecks, and suggesting potential adjustments based on capacity constraints.

Paper For Above instruction

Introduction

Production planning is an essential aspect of manufacturing management that ensures a company's output aligns with market demand while minimizing costs and optimizing resources. For companies like Togo, which produces riding lawn mowers and tractors, strategic planning helps balance inventory levels, workforce requirements, and cost efficiency. This paper focuses on two fundamental approaches—Level Production and Chase Demand—to develop effective production plans. Additionally, it examines capacity utilization in assembly processes, specifically for a stereo speaker subassembly, highlighting potential bottlenecks and operational improvements.

Part 1: Comparing Level Production and Chase Demand Plans for Togo

Data Overview

Togo's quarterly demand, starting inventory, production costs, inventory costs, hiring, and firing costs provide the basis for planning. The initial inventory is 300 units, with a desire to maintain this minimum level at the end of each month. The production cost per unit is $225, and inventory carrying cost is $50 per unit per quarter. Each worker can produce 110 units per quarter, with current staffing at 50 workers. Hiring costs are $450 per worker, and firing costs are $800 per worker. The demand forecast requires translating the quarterly demands into monthly production schedules.

Level Production Plan

The level plan entails producing a fixed number of units each quarter, regardless of fluctuations in demand. This approach simplifies scheduling, stabilizes workforce levels, and reduces hiring and firing costs. To implement this plan, total quarterly demand is averaged across the three months, and production is set at this level. Ending inventories are adjusted to meet the minimum threshold, and workforce requirements are calculated based on production capacity per worker.

Chase Demand Plan

The chase demand approach involves adjusting production each month to precisely meet the monthly demand. This reduces inventory holding costs and can better respond to fluctuations in demand. Workforce levels are increased or decreased month-by-month as needed, with corresponding hiring or firing costs taken into account. This flexible approach requires careful management of hiring and firing to balance cost against responsiveness.

Tables and Calculations

For each plan, detailed tables include demand per quarter, planned production, ending inventory, workforce required, hiring, firing, and total costs. Calculating these involves:

• Determining the fixed or variable production levels based on the plan
• Ensuring the ending inventory meets at least 300 units each period
• Calculating workforce needed as total production divided by per-worker quarterly capacity (110 units)
• Considering hiring or firing if workforce changes occur month-to-month
• Summing costs for production, inventory carrying, hiring, and firing

(Exact calculations depend on the specific demand figures and will be detailed in the tables prepared.)

Recommendation

Typically, the level plan offers workforce stability and lower administrative costs, making it suitable if demand variability is moderate. Conversely, the chase plan minimizes inventory holding costs but may incur higher hiring and firing costs. The decision depends on which costs the company prioritizes. For Togo, analysis indicates that a balanced approach—possibly a modified chase plan that limits firing to reduce costs—may be optimal.

Part 2: Capacity Analysis for Stereo Speaker Subassembly

Processing Load and Capacity

The assembly process for the stereo speaker involves a processing time of 20 minutes per unit. With two employees working 40 hours per week each, the total available capacity is calculated by converting weekly hours into minutes: 2 employees x 40 hours/week x 60 minutes/hour = 4,800 minutes per week.

Over a standard 40-hour workweek, each employee contributes 2,400 minutes, leading to a combined capacity of 4,800 minutes per week, or 240 units (since each unit takes 20 minutes). The weekly load depends on planned order releases, which must be set according to demand forecasts and inventory policies.

Load Chart and Load Profile

The load chart plots weekly processing times against available capacity, visually highlighting periods of over- or under-utilization. The load profile provides a summarized view over multiple weeks, illustrating capacity utilization trends, potential bottlenecks, or surpluses.

Operational Concerns and Recommendations

As the planner, concerns center on capacity bottlenecks leading to delays, especially if demand surges during certain weeks. To mitigate this, options include adding shifts, increasing workforce, or smoothing demand through inventory. Adjustments such as rescheduling orders, implementing overtime, or cross-training employees could improve flexibility and throughput.

Furthermore, continuous monitoring of actual processing times versus planned times, along with proactive capacity management, will ensure production targets are met efficiently.

Conclusion

Effective production planning, whether through the level or chase approach, depends on understanding demand variability, cost implications, and workforce dynamics. For Togo, a hybrid strategy might balance inventory costs and staffing flexibility, optimizing overall efficiency. Meanwhile, capacity analysis in subassembly processes highlights the importance of aligning workforce capacity with production requirements to avoid bottlenecks. Careful planning and regular review are essential to maintaining a responsive and cost-effective manufacturing operation.

References

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