A firm produces a moderate variety of products to stock in a single plant. The plant is organized in a functional layout with some work cells. Which of the following indicators most appropriately would be used to evaluate the effectiveness of the detailed capacity planning processes?
The change in level of WIP inventory can indicate how well the detailed capacity planning processes are aligned with the MPS and the actual demand. A positive change in WIP inventory means that more products or components are being produced than consumed, which implies that there is excess capacity or insufficient demand. A negative change in WIP inventory means that more products or components are being consumed than produced, which implies that there is insufficient capacity or excess demand. A zero or minimal change in WIP inventory means that the production and consumption rates are balanced, which implies that there is optimal capacity and demand. Therefore, by monitoring the change in level of WIP inventory, the firm can evaluate whether its detailed capacity planning processes are effective in meeting customer needs and expectations, as well as minimizing inventory costs and maximizing resource utilization.
The other options are not as appropriate indicators to evaluate the effectiveness of the detailed capacity planning processes for a firm that produces a moderate variety of products to stock in a single plant. Units of output per direct labor hour is a measure of labor productivity, which indicates how efficiently labor is used to produce output. However, labor productivity does not reflect the effectiveness of detailed capacity planning processes, because it does not account for other factors that affect production, such as equipment, materials, quality, or demand. Percentage of master schedule attained is a measure of schedule performance, which indicates how well the actual production matches the planned production. However, schedule performance does not reflect the effectiveness of detailed capacity planning processes, because it does not account for other factors that affect production, such as capacity constraints, resource availability, or customer satisfaction. Level of finished goods inventory is a measure of inventory management, which indicates how much inventory is available to meet customer orders. However, finished goods inventory does not reflect the effectiveness of detailed capacity planning processes, because it does not account for other factors that affect production, such as product variety, lead time, or quality.
Marketing has requested a significant change in the mix for a product family. The requested change falls between the demand and the planning time fences. The most appropriate action by the master scheduler is to:
Collaborative planning, forecasting, and replenishment (CPFR) typically would be most effective for a:
The other options are not as suitable for CPFR as a regional headquarters for a large home improvement retailer. A distributor with a few major customers and many smaller customers may not have enough incentives or resources to implement CPFR with all its customers, especially the smaller ones who may have low volumes or high variability in demand. A manufacturer that sells directly to a large number of firms may face challenges in coordinating and communicating with all its customers, as well as managing the complexity and diversity of their demand patterns. A company that has a large number of geographically dispersed suppliers may encounter difficulties in establishing trust and transparency with its suppliers, as well as ensuring the quality and reliability of their products or services.
In which of the following phases of the product life cycle is product price most effective in influencing demand?
Product price is most effective in influencing demand in the introduction phase of the product life cycle. The product life cycle is a concept that describes the stages that a product goes through from its development to its decline. The introduction phase is the first stage, when the product is launched into the market and consumers are made aware of its existence and benefits. In this phase, product price can have a significant impact on the demand for the product, depending on the following factors:
Therefore, product price can be an effective tool to influence demand in the introduction phase of the product life cycle, depending on how innovative and competitive the product is. A high price can signal quality, exclusivity, and differentiation, while a low price can signal affordability, accessibility, and penetration.
In a lean environment, the batch-size decision for planning "A" items would be done by:
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