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Linear programming - MacPherson refrigeration
MANAGERIAL DECISION MAKING
MACPHERSON REFRIGETARION LIMITED - CASE
XX/XX/2012
Index
1. Introduction 3
2. Assumptions 3
3. Solution Approach 4
4. Results 5
5. What – if analyses 6
6. Overall recommendation 7
7. Appendices 8
1. Introduction
MacPherson Refrigeration Limited (MRL) is a Canadian company specialized in commercial refridgeration. They were established 30 years ago and currenly have sales of about $28.5 million. Ten years ago they opened a new 300,000 square foot plant in Stratford, Ontario to difersify into consumer refrigeration. Linda Metzler has recently been appointed as its planning manager. She has been asked to submit an production plan for the next calender year. Each year MRL’s marketing and sales department produces a forcast of appliances by month for the next year, which the production planning department uses to plan production. The first step in the planning process is to construct an aggregate production plan, which consists of the planned gross production by month for the year but does not indicate numbers of specific appliace types, sizes or models to be made each month but is an aggregate as each type of appliance requires roughly similar materials and labour resouces. As the production periods approach later in the year, master production plans will be formulated which would be specific regarding appliance type, model number etc.
Linda therefore needs to make a decision on what would be the most suitable plan to keep costs at a minimum but also taking into consideration the feasibility of the plan. Primarily, the plan should involve keeping the total cost (equal to the sum of hiring costs, layoff costs, inventory costs and both regular and overtime labour costs) as low as possible. It should also
MANAGERIAL DECISION MAKING
MACPHERSON REFRIGETARION LIMITED - CASE
XX/XX/2012
Index
1. Introduction 3
2. Assumptions 3
3. Solution Approach 4
4. Results 5
5. What – if analyses 6
6. Overall recommendation 7
7. Appendices 8
1. Introduction
MacPherson Refrigeration Limited (MRL) is a Canadian company specialized in commercial refridgeration. They were established 30 years ago and currenly have sales of about $28.5 million. Ten years ago they opened a new 300,000 square foot plant in Stratford, Ontario to difersify into consumer refrigeration. Linda Metzler has recently been appointed as its planning manager. She has been asked to submit an production plan for the next calender year. Each year MRL’s marketing and sales department produces a forcast of appliances by month for the next year, which the production planning department uses to plan production. The first step in the planning process is to construct an aggregate production plan, which consists of the planned gross production by month for the year but does not indicate numbers of specific appliace types, sizes or models to be made each month but is an aggregate as each type of appliance requires roughly similar materials and labour resouces. As the production periods approach later in the year, master production plans will be formulated which would be specific regarding appliance type, model number etc.
Linda therefore needs to make a decision on what would be the most suitable plan to keep costs at a minimum but also taking into consideration the feasibility of the plan. Primarily, the plan should involve keeping the total cost (equal to the sum of hiring costs, layoff costs, inventory costs and both regular and overtime labour costs) as low as possible. It should also