Waterpumps Essay

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Chapter 2 Case Study Meridian Water Pumps This case is a fairly simple case to work on analytically, yet can provide the basis for a good discussion about the tradeoffs involved with making a good production plan or Sales and Operations plan. While there are clearly differences in the financial results of the possible plans, there are clearly non-financial issues that can and should be discussed in order to give students a better overall perspective involved with this important planning process. Here are sample solutions to the assignment questions: 1. After reading the data, I have developed a level production plan. The data is read as follows: • The total demand for the six months is 4650 units. • The current inventory is 50 and • The target inventory for the end of the six month is 25, • This is where we have to reduce the required production for the six months So, we have no we should have 4625, brought on by (4650-25). The rest of the formula goes like this: 4625/ 6 months = 771. And this will be the required number of pumps needed monthly. Next is the number of pumps one employee can produce in one month. Which is, 771/25 (number of pumps for one employee a month, the company would need a total of 30.8 workers, or 31 (rounding up). After this information is gathered, these are the possible results: • We need to hire 11 more employees (there are now 20, and we need 31) • In the case reading, it is shown that there are up front cost of $1100 this is found the $100.00 hiring cost, multiplied by the 11 new employees. • Monthly production ----- 775 (31 workers x 25 pumps per worker) • The end of month inventory will be figured as 1 will be 225 >>>> this is the production of 775 (+) existing inventory of 50 = 825, then (-) the production of 600. Month 1 2 3 4 5 6 Demand 600 750 1000 850 750 700 Production 775 775 775 775 775

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