Reference no: EM132293739
Metropolitan Plastics Corporation is a medium-sized company, specializing in the design and manufacture of figurines for sale in novelty stores, as fan-appreciation items for sports teams, and custom-made items for corporate promotional events.
Management has been dissatisfied with production planning. Production plans are created using best guesses of demand for each product, which are based on how much of each product has been ordered in the past. If a customer places an unexpected order or requests a change to an existing order after it has been placed, there is no way to adjust production plans. The company may have to tell customers it can’t fill their orders, or it may run up extra costs maintaining additional inventory to prevent stock-outs. Furthermore, since custom-made items have a far higher revenue per item, manufacture of those items usually has a higher priority than the regular production, but requires additional set-up effort of the manufacturing equipment, causing disruption of regular production runs.
At the end of each month, orders are totaled and manually keyed into the company’s order management system. Data from the past month’s production and inventory systems are manually entered into the firm’s production planning system. Analysts from the sales department and from the production department analyze the data from their respective systems to determine the sales targets and production targets for the next month, along with the custom-made products. Unfortunately, the estimates from the different departments rarely match, so analysts get together at a high-level planning meeting to revise the production and sales targets to take into account senior management’s goals for market share, revenues, and profits. The outcome of the meeting is a finalized production master schedule.
The entire production planning process takes 17 business days to complete. Nine of these days are required to enter and validate the data. The remaining days are spent developing and reconciling the production and sales targets and finalizing the production master schedule with management.
Complete the following, focusing on the production planning process:
Diagram the existing Production Planning Process. Using a diagramming tool (Visio, Lucidchart, PowerPoint) model the existing process. (35 pts) Insert your diagram (not a link) here. You may also attach a PDF of your diagram with your submission.