MACPHERSON REFRIGERATION LIMITED
PREPARATION FOR: "MACPHERSON REFRIGERATION LIMITED" CASE
Read the case, and answer the following questions:
1. Search in the library (books on Operations Management or Production Management), to find the main components of the “Aggregate Production Planning” problem and briefly describe which are “pure strategies” and “mixed strategies” to solve this problem.
The aggregate demand is the total demand for all products/services produced by a production facility without considering size, models, etc., usually there are significant seasonal variations. The objective of the Aggregate Production Plan is to manage production in order to meet the aggregate demand, matching capacity with demand fluctuations.
The main components of APP are: external (Market Demand, Economic Conditions, Raw Material Availability and Competitors Behaviors) and internal (Production, Workforce Level, Inventory Level, Subcontracting, Backlog Policy, Physical Plant Capacity, Union Agreement, Capital Limit, among others).
The mentioned components can be modified to create production strategies which can be applied to this problem:
Pure strategies: Considering one variable at a time to demand fluctuation:
1. Varying Workforce Level (Hiring or Firing).
2. Varying Production Rate (Overtime/Length of Work Hour)
3. Varying Inventory Level (High or Low).
Mixed strategies: Considering two or more variables at a time to demand fluctuation:
1. Varying both Workforce Level and Inventory Level.
2. Varying both Production Rate and Inventory Level.
2. Find the following parameters of the problem (specify the units involved):
Productivity 450 app/worker-year
Expected for next year: 480 app/worker-year
Regular Labour Cost $10.50/hr-worker
Overtime Labour Cost 1.5 times the regular hourly rate; $15.75/hr-worker
Hiring Costs $1,800/worker
Layoff Costs $1,200/worker
Inventory Holding Costs $8/app-month
Initial capacity 13,000 app/month
Beginning Inventory 240 app
3)
Read the case, and answer the following questions:
1. Search in the library (books on Operations Management or Production Management), to find the main components of the “Aggregate Production Planning” problem and briefly describe which are “pure strategies” and “mixed strategies” to solve this problem.
The aggregate demand is the total demand for all products/services produced by a production facility without considering size, models, etc., usually there are significant seasonal variations. The objective of the Aggregate Production Plan is to manage production in order to meet the aggregate demand, matching capacity with demand fluctuations.
The main components of APP are: external (Market Demand, Economic Conditions, Raw Material Availability and Competitors Behaviors) and internal (Production, Workforce Level, Inventory Level, Subcontracting, Backlog Policy, Physical Plant Capacity, Union Agreement, Capital Limit, among others).
The mentioned components can be modified to create production strategies which can be applied to this problem:
Pure strategies: Considering one variable at a time to demand fluctuation:
1. Varying Workforce Level (Hiring or Firing).
2. Varying Production Rate (Overtime/Length of Work Hour)
3. Varying Inventory Level (High or Low).
Mixed strategies: Considering two or more variables at a time to demand fluctuation:
1. Varying both Workforce Level and Inventory Level.
2. Varying both Production Rate and Inventory Level.
2. Find the following parameters of the problem (specify the units involved):
Productivity 450 app/worker-year
Expected for next year: 480 app/worker-year
Regular Labour Cost $10.50/hr-worker
Overtime Labour Cost 1.5 times the regular hourly rate; $15.75/hr-worker
Hiring Costs $1,800/worker
Layoff Costs $1,200/worker
Inventory Holding Costs $8/app-month
Initial capacity 13,000 app/month
Beginning Inventory 240 app
3)
Bibliography: Murthy, P. Rama. (2005). Production and Operations Management. USA: New Age International.