4.2.2 Capacity Planning:
Capacity planning is the process of determining the production capacity needed by our organization to meet changing demands for its products. In the context of capacity planning, "design/Installed capacity" is the maximum amount of work units that our organization is capable of completing in a specified standard period. "Effective capacity" is the maximum amount of work that our organization is capable of completing in a given period due to constraints such as quality problems, delays, material handling, etc.
A discrepancy between the capacity of an organization and the demands of its customers results in inefficiency, either in under-utilized capacity/resources or unfulfilled customers. The goal of capacity planning
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Lead strategy is adding capacity in anticipation of an increase in demand. Lead strategy is an aggressive strategy with the goal of luring customers away from the company's competitors by reducing lead-time. It is also a strategy aimed at reducing stock-out costs.
2. Lag strategy refers to adding capacity only after the organization is running at full capacity or beyond due to increase in demand. This is a more conservative strategy. It decreases the risk of waste, but it may result in the loss of possible customers.
3. Match strategy is adding capacity in small amounts in response to changing demand in the market. This is a more moderate strategy. To followthis strategy more prominently for most projects in phases.
Recommendation: Match Strategy is preferred for capacity planning. It has proven its merit in many project. If planned properly, the incremental capacity cost is also less. Also cash flow gets staggered. Also immediate demand increase can be tackled by third shift operation.
4. Adjustment strategy is adding or reducing capacity in small or large amounts due to consumer's demand, or, due to major changes to product or system
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b) 5 Year Volumes Projections
These are projected volumes given by Business planning in to identify the capacity shortfalls in advance and prepare the capacity planning road map to get rid of bottlenecks. These volumes are made available usually at inQ4 of each year. If any new product introduction is planned in next 5 years, then corresponding volumes also are part of 5 year volume projections.
c) Spares and other requirements from LOB: Spares requirements come from Spares division. These are replacement requirements for parts/ aggregates which have failed in field. For capacity planning purpose, wherever applicable, 5% additional volumes to be considered for spare parts
Other requirements come from LOBs which are doing non-core business for revenue generation. E.g. Industrial engines. The projections from concerned LOBs are to be considered for capacity calculations
Hence for such aggregates:
Total Capacity volumes= 5Yr volume projections+ Spares requirements+ LOB requirements
d) Manufacturing strategy (Location) & Make-Buy decisions (Aggrgeate
BSBMGT616 Develop and implement strategic plan Task 4 KPI Progress is to set goals for management to meet and for the company to grow. The KPI plan is 200 products installed. However, only 180 there installed in the past 12 months this is due to tourist slump with the strong Australian dollar. Another strategy will be to establish Australian Hardware Melbourne warehouse. Within two years Melbourne will open after Sydney open for business.
Month 1 2 3 4 5 6 Forecasted Demand 600 750 1000 850 750 700 Month 1-6 if added equals to 4,650. Currently there is 50 units in inventory, ending inventory is 25 with a current worker of 20. The hiring and lay off cost is $100 each and an inventory cost of storage per unit is $5. So 4650+25-50= 4625 units. With that being said we use the formula in which total units/number of periods give us 4625/6= 770.8 units.
It is imperative to understand the current conditions of what materials are candidates for return, compared to the performance level of returns achieved each day. The delta between the identified material returns and the actual returns will provide information for goal setting. Additionally, with the transfer of raw materials into the warehouse, there must be a transaction to receive it into inventory and distribute it to the appropriate location. At that point, the process will be complete for the appropriate accounting of the materials, creating availability for consumption at the next production demand. The data collected will be influential in developing a robust procedure for each assembly line to follow in a consistent manner.
In most cases, competitive moves by one firm have noticeable effects on its competitors and, thus, may invite retaliation or efforts to counter the move (Porter 1980). Companies respond to competitor challenges by counterattacking with increasing advertising expenditures, cutting prices,
KETING STRATEGY A marketing strategy is a process or model to allow a company or organization to focus limited resources on the best opportunities to increase sales and thereby achieve a sustainable competitive advantage. Or it is a process or model to allow a company to focus limited resources on the best opportunities to increase sales and there by achieve sustainable competitive advantages. The marketing strategies of Hilton Garden Inn are as follows. Philip Kotler defines marketing as a social process used by the people, individually or in a group to achieve what they want by the creation or exchanging their product details and their values with others.
EXECUTIVE SUMMARY M. PROCESS --> situational analysis - product life cycle Product life cycle involves four main stages which a product has to pass through such an introduction, growth maturity and decline. Numerous business innovate or invent inspired by someone’s great idea to produce a product which would be fresh in market, different compared to others and which also is innovative and perhaps superior to the one which available. Similarly with the most successful company Microsoft corporation’s product Microsoft office which as already touched to maturity stage according to its features: • Product features and packaging try to differentiate the product from those of competitors: Microsoft office is a brand that has extensively diversified
Capacity planning This is the process of knowing the production capacity an organization needs to meet the changing demands for the products. It helps to determine the quantity of the product needed by a firm to meet the demands of its customers. The capacity planning elements for Walmart are; facility, product and service, and human resource.
Direct labor which is a human resource will be recalculated on the basis of sales of 3 million bikes. It may happen to produce 1 million products, they require 50000 employees but to produce 3 million products they require 200000 employees and to be on safer size, 10% extra labor will be recruited which will give a total of 220000 employees. Therefore it is clearly understood that the company can prepare their Labor Requirement budget directly from the sales budget. The same concept will apply to overhead and capital expenditures because overheads are directly proportional to the production and if the sales are high, product will automatically are high. Similarly quantity requirement will lead to the requirement of machines.
The pricing strategy must align with an organization’s marketing objectives. Accordingly, Dyson should institute premium pricing and avoid discounting—to reinforce the firm’s value and market position. 4.5 Distribution and Supply
EXECUTIVE SUMMARY TABLE OF CONTENTS Executive Summary 1 Introduction 3 Competitive Situation 4 Variable Costing 5 Existing Costing System 6 Diagram ABC 8 Activity Based Costing & Profitability 9 Conclusion 14 Bibliography 15 INTRODUCTION COMPETITIVE SITUATION Firstly, here is a brief description of what Wilkerson Company specializes in. According to our case study and various online sources, Wilkerson manufactures and markets a complete line of compressed air treatment components and control products.
Fine Tuning the forecast The method used to forecast the expected sales lacks the input of external data like market condition (recession, boom etc), competitors, changing preferences, change in fashion, demographics etc. Only the internally available data has been used to estimate the demand for next period. The adjustments in the demand forecast can be made according to the following to reduce the chances of stock outs or over stocking: Market Condition:
In fact, it is similar to an operational plan, represented in the financial terms considering income and expenditure’s estimation (Dees & Paul, 2004). Actually, the personnel
In order to achieve its goal, Amazon implements some strategy during their planning stage, namely cost leadership strategy and differentiation strategy. 2.1.1.1 Cost leadership Strategy Amazon is implementing cost leadership strategy as its core strategy in serving its customers. The company has enormous number of warehouses and processing capabilities, which provide the company physical economies of scale. (ACCA, 2015)
6.1 Marketing Mix Marketing mix is a set of controllable marketing tactics used by business to promote their product and achieve its marketing objectives. (L. Lake, 15 June 2017) Marketing mix is also called the 4Ps which consist of Promotion, Place, Product and Price. (M. J. Baker, 2001, p.54) 6.1.1 Product
Exercise 3 Introduction Push and pull are strategic supply chain decisions can that are as a results of the impacts of operational, product and demand related variables (Wanker and Zinn, 2004). The push strategy moves products based on planning or forecasting whereas the pull strategy moves products as a results of real demand (Ballou, 1992). Thus in a push system, the products are pushed through the supply chain channel right from production to the retailer. The manufacturer builds its production based on historical ordering patterns and forecasting. Due to this it takes a longer time for this system to respond to changes in demand which results in overstocking, bottlenecks and bullwhip effect in the system.