1. What types of decisions must Jim McMaster make on a daily basis for Natural Designs to run smoothly? What kind of decisions must he make on a long-term basis?
Depending on sales volume Jim has to decide how many orders need to be satisfied daily, which includes production and distribution of the products to customers. As orders are received and updated real-time with the help of the internet, daily production targets should be updated. Jim will also have to decide on a daily basis how many employees will work on customized feeders depending on the volume of sales orders. Because orders vary per season, he can train other employees from other departments/products for the skills needed in producing the customized bird feeders. These employees can work on the customized bird feeders product during peak season and go back to their original job function or product on low-volume seasons. Jim should also consider quality control as part of his daily decisions to ensure that customers receive high quality products.
Due to Jim’s increased costs and decrease in profit he needs to review product costs and identify which costs he can do without. He may also consider opening a second facility or even moving to a larger building to take on customer demand. In terms of capacity Jim can review his current product range since 500 SKUs maybe large enough for a company with only 15 employees. He can trim down his product offerings or hire additional employees. But since Jim may currently be having problems with cost control, trimming down the company’s SKUs may be more beneficial.
2. Describe the operations strategy for Natural Designs. Has this strategy changed as a result of the custom bird feeder operation? If yes, how?
The original operations strategy for Natural Designs was response or time/delivery. . As the business expanded, he made use of the internet to make...
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