Level capacity plan, Operation Management

Assignment Help:

Level Capacity Plan

The inventory size is varied keeping the workforce size and utilization of work constant. The number of workers ( working size) is kept constant throughout the time period under consideration. During months of low demand the excess units required over the units produced are taken from the inventory. The benefit of this plan is that the cost of hiring and training new. Workers is zero. Also the cost of laying off workers is zero, as the workforce size is constant. The employee morale is high due to sense of job security. During periods of low demand, there is a high inventory cost due to its large size.

2427_Level  capacity plan.png

Figure: Level Capacity Plan

Figure shows the level capacity plan of a company manufacturing a product on produce to stock and sell basis. In the first quarter aggregate demand is less than production and inventory builds up till the end of the First Quarters . in the second third and fourth quarters are inventory levels Decline because production is less than the aggregate demand. In the fifth Quarter the production is more than the aggregate demand and hence Inventory builds up again.


Related Discussions:- Level capacity plan

Service operations managers - left in the dust, Ques: On what basis do you ...

Ques: On what basis do you think Schmenner (1986) suggests that service managers who see themselves as unique may be 'left in the dust'? Ans: Schmenner (1986) suggests that if s

What the cafeteria should use, A cafeteria wants to introduce a new burger,...

A cafeteria wants to introduce a new burger, with bread and beef together weighing at least 1 ounce. The cafeteria manage also wants the new burger to meet a new nutrition standard

Japanese firms used the which concept, Q All of the following are responsib...

Q All of the following are responsibilities of operations managers except Question options: 1) acquiring financial resources 2) managing inventories 3) planning production 4) sched

Factor for plant location choice - availability of transport, Factor for pl...

Factor for plant Location choice - Availability of Transport There are five basic modes of physical transportation air road rail water and pipeline. Goods intended for export

What liabilities does gm have towards its employees, What responsibility do...

What responsibility does GM have towards its employees? Does GM have the same responsibility to the employees of its suppliers?

Operation Management and POM QM sums , The assignment consists of 3 exercis...

The assignment consists of 3 exercises, and the marks for each question varies. Printouts provided with the prose solutions and explanation of the POM-QM solutions must be original

Flow Time, You know that our average weekly sales are $2,500 and the flow t...

You know that our average weekly sales are $2,500 and the flow time is half day. Surely with this information, you should have no problem maintaining an inventory level of $400 to

OR, Explain OR Models

Explain OR Models

A Make or Buy Analysis, A Make or Buy Analysis Managers at Wagner Fabrica...

A Make or Buy Analysis Managers at Wagner Fabricating Company are reviewing the economic feasibility of manufacturing a part that it currently purchases from a supplier. Forecas

Give expectancy theory claims that motivation is a function, Expectancy the...

Expectancy theory claims that motivation is a function of Answer efforts, performance, and rewards. individual traits and supervisory skills. aptitude, training, and op

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd