Case study:Covolo Diving Gear
Then, answer the following Questions:
I. Develop a level production plan, for Corot Diving Gear. What are the advantages and disadvantages of this plan? Could Cowlo implement a pure chase plan, given the current capacity? Why? If sales continue to grow, what are the implications for production capacity at Congo?
2. Patricia Rodriguez, vice president of marketing, states, I've got to tell you all that Em pretty comfortable with the forecasts for September through November, but after that, a lot could change. It's just very hard to forecast for four or more months out in this kind of market." Now will a monthly SALOP update with rolling planning horizons help alleviate Patricia's concerns? Are there still advantages to S8KW. even though the forecasts may change?
3. After looking over the level production plan. David Grif¬fin. vice president of manufacturing, speaks up: This looks okay. but you know what bugs me about it? The as¬sumption that if a worker is available. that worker has to be making gauge sets. even if we don't need any more. It might make sense in some cases to just have the worker not reduce rather than lay MI a worker in one month and hire someone else back the next you agree? What are the holding costs associated with having an extra worker produce gauge sets for one month? How do these compare to the layoff and hiring costs? How might a strategy of keeping extra workers idle affect the estimated manufac¬turing costs for the gauge sets? (Hint: Labor costs have to be accounted for somewhere)