Togo Makes Riding Lawn Mowers And Tractors The Compan 866182

Togo makes riding lawn mowers and tractors The companys expected qua

Togo makes riding lawn mowers and tractors. The company’s expected quarterly demand, initial inventory levels, production costs, and workforce data are provided. The assignment requires calculating and completing the production plans under two different strategies: the Level Plan and the Chase Plan. Additionally, an analysis of the plans to recommend the most suitable approach will be required.

Paper For Above instruction

The company Togo, renowned for manufacturing riding lawn mowers and tractors, faces critical operational decisions regarding inventory and workforce management amid fluctuating quarterly demand. The core challenge involves selecting the most cost-efficient and effective production planning strategy to meet demand while maintaining desired inventory levels and controlling operational costs. This paper analyzes two predominant planning methods—Level and Chase plans—to evaluate their suitability based on cost considerations, workforce flexibility, inventory implications, and overall operational efficiency.

Overview of Production Planning Strategies

Production planning strategies are essential to align manufacturing output with demand fluctuations while optimizing costs and resource utilization. The Level Plan emphasizes uniform production throughout the period, regardless of varying demand, to stabilize workforce levels and production schedules. Conversely, the Chase Plan seeks to match production exactly with demand each period, necessitating flexible workforce adjustments and potentially incurring hire and fire costs.

Analysis of the Level Plan

Under the Level Plan, the company aims to produce a constant number of units each quarter—specifically, aligning production with the average quarterly demand. Given the quarterly demand of 30,000 units, the company would set a steady production rate of 30,000 units per quarter. Starting with an inventory of 300 units, this approach ensures a predictable production schedule, minimized workforce fluctuation, and consistent inventory buildup or depletion depending on demand trends.

The costs associated with the Level Plan include the steady production cost, inventory carrying costs, and workforce stability costs. Since the workforce remains unchanged, hire and fire costs are negligible, but inventory costs could fluctuate depending on whether demand exceeds or falls below production levels. The inventory cost per unit per quarter is $50, and the production cost per unit is $225. The stable workforce would require mapping the number needed to produce 30,000 units per quarter, which, given each worker's capacity of 110 units per quarter, necessitates approximately 273 workers per quarter (since 30,000 units / 110 units per worker ≈ 273). Starting from 50 workers, the company would need to evaluate if additional hiring is necessary or if current capacity suffices.

Calculation steps include determining total production costs, inventory costs at the end of each quarter, and any hiring or firing costs associated with staffing adjustments. As the workforce remains constant in the Level Plan, these costs are minimal, primarily focused on steady operations. The plan benefits from operational stability but might incur higher inventory costs if demand is lower than production.

Analysis of the Chase Plan

The Chase Plan closely aligns production with actual quarterly demand, resulting in varying workforce levels each period. If demand is 30,000 units per quarter, then production adjusts accordingly, and so does the staffing. The key advantage of this plan is minimizing inventory holding costs by matching supply to demand, but it introduces variability in workforce size, which leads to hiring and firing costs.

Given each worker produces 110 units per quarter, the required workforce per quarter can be calculated based on actual demand—e.g., to meet 30,000 units, the company needs approximately 273 workers, similar to the Level Plan. However, actual quarterly demand may fluctuate, requiring the company to add or reduce the workforce accordingly. These adjustments trigger hiring costs of $450 per worker and firing costs of $800 per worker. The plan may incur higher operational costs due to hiring and firing but benefits from reduced inventory costs and increased responsiveness to demand fluctuations.

Cost implications include production costs, hiring and firing costs, and inventory costs. The flexible workforce allows for lower inventory holdings, reducing storage-related expenses, but the costs and logistics of workforce adjustments must be managed prudently to avoid operational disruptions.

Comparative Analysis and Recommendations

When comparing the two strategies, stability and predictability favor the Level Plan, especially if the company prioritizes consistent staffing and inventory levels. However, this approach might lead to higher inventory costs if actual demand is lower than production. The Chase Plan offers greater flexibility and responsiveness, potentially reducing inventory costs but increasing workforce management complexity and associated costs.

Given the data and assumptions: the Level Plan's advantage lies in operational stability and predictable costs, making it suitable if demand is relatively stable. The Chase Plan is advantageous if demand fluctuates significantly, requiring agility in workforce management. To reduce overall costs, a hybrid approach could be considered, where the company plans for a baseline production level while adjusting for significant demand changes, thereby optimizing costs and operational flexibility.

In conclusion, the choice between the Level and Chase plans depends on the company's strategic priorities—cost minimization through stability or flexibility in meeting market demand. Based on the detailed analysis, if demand remains consistently around 30,000 units per quarter, the Level Plan is recommended for its simplicity and cost-effectiveness. However, if demand varies unpredictably, the Chase Plan's responsiveness justifies its higher workforce adjustment costs. Ultimately, a tailored approach that balances these strategies may serve Togo best in aligning operations with market dynamics.

References

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