Bus 307 Operations Management and Quantitative Techniques
Mastering the Bread Making Master Schedule and
Producing Automobiles Leaner
Your Name
BUS 307 Operations Management and Quantitative Techniques
Your Instructors
Date
Introduction
The Realco Breadmaster A master production schedule is used by business organizations as a metric to ascertain whether or not their production (outputs) meets their supply demands (inputs). There are times when a business wants to have a surplus and at others letting inventory dwindle to smaller numbers is optimal. The idea is to ensure that customers get their orders in a timely manner to retain loyalty, maximize profits, and reduce overhead and direct costs. The Realco Breadmaster Company has a new bread maker in the hopes of increasing their revenue. In question is the cost and efficiency of the new bread maker. The owner of Realco, Johnny Chang, wants a Master Production Schedule (MPS) designed. With the MPS on hand it is clear that Realco will indeed meet their customer’s requirements based on the production available to include the promised shipments in 3 weeks. On the 8th week however, they will have a surplus of inventory. Mr. Chang the owner stated that the ending inventory of 51,650 units was too high and should be used as a Reorder Point (ROP) to indicate that there is a problem with overproducing. Fortunately Realco has not overpromised since they are able to meet their customer’s demands with the excess inventory. This does indicate that production numbers need to be readjusted to accommodate consumer demand. According to Marketing Manager Jack Jones, “nearly all orders can be filled within two weeks, so we promise them three weeks. That gives us a cushion, just in case.” (Bozarth & Handfield, 2008). The thinking behind this is to ensure that customers can get their orders without delay and provide a cushion if there is a delay somewhere upstream in the supply chain. The negative aspect to this is the inventory on hand is going to be higher than it
Producing Automobiles Leaner
Your Name
BUS 307 Operations Management and Quantitative Techniques
Your Instructors
Date
Introduction
The Realco Breadmaster A master production schedule is used by business organizations as a metric to ascertain whether or not their production (outputs) meets their supply demands (inputs). There are times when a business wants to have a surplus and at others letting inventory dwindle to smaller numbers is optimal. The idea is to ensure that customers get their orders in a timely manner to retain loyalty, maximize profits, and reduce overhead and direct costs. The Realco Breadmaster Company has a new bread maker in the hopes of increasing their revenue. In question is the cost and efficiency of the new bread maker. The owner of Realco, Johnny Chang, wants a Master Production Schedule (MPS) designed. With the MPS on hand it is clear that Realco will indeed meet their customer’s requirements based on the production available to include the promised shipments in 3 weeks. On the 8th week however, they will have a surplus of inventory. Mr. Chang the owner stated that the ending inventory of 51,650 units was too high and should be used as a Reorder Point (ROP) to indicate that there is a problem with overproducing. Fortunately Realco has not overpromised since they are able to meet their customer’s demands with the excess inventory. This does indicate that production numbers need to be readjusted to accommodate consumer demand. According to Marketing Manager Jack Jones, “nearly all orders can be filled within two weeks, so we promise them three weeks. That gives us a cushion, just in case.” (Bozarth & Handfield, 2008). The thinking behind this is to ensure that customers can get their orders without delay and provide a cushion if there is a delay somewhere upstream in the supply chain. The negative aspect to this is the inventory on hand is going to be higher than it
Cited: Bloomsberg Weekly. (2011, January 01). Retrieved November 27, 2011, from Business Business Weekly: http://www.businessweek.com Bozarth, C. C., & Handfield, R. B. (2008). Introduciton to Operations adn Supply Chain Management. Upper Saddle River: Pearson Prentice Hall. Kaizen Institute of America. (2011, January 01). Retrieved November 27, 2011, from Kaizen Institute: http://www.kaizen.com