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

Method which benefit from standardization of ihrm activities, Examine two i...

Examine two issues of standardization and localization in general for MNEs. Determine two ways in which an organization would benefit from standardization of IHRM activities and tw

Explain how many units produced to maximize the profit, The Toys-R-4-U Comp...

The Toys-R-4-U Company has developed two new toys for possible inclusion in its product line. Setting up the production facilities to begin production would cost $50,000 for toy 1

Explain collected information on the number of customers, Rosa's Italian re...

Rosa's Italian restaurant wants to develop forecasts of daily demand for the next week. The restaurant is closed on Mondays and experiences a seasonal pattern for the other six day

Effect of statistical process control, Effect of Statistical Process Contro...

Effect of Statistical Process Control The essence of this approach is that, having set up a process and established that it is stable, sample measurements of the process outpu

Explain well-designed teams tend to sabotage leaders, When it comes to how ...

When it comes to how a team is designed (i.e., members, communication, goals, norms, etc.) and team leadership, which of the following statements is most true based upon the studie

Describe fixed-order quantity total cost, Which of the following is the set...

Which of the following is the set of all cost components that make up the fixed-order quantity total cost (TC) function? Answer a. Annual holding cost, annual ordering cost,

What is the theoretical minimum number of stations, A company is setting up...

A company is setting up an assembly line to produce 192 units per 8-hour shift. The following table identifies the work elements, times and immediate predecessors:  (a)  Wh

Explain future trends in advertising, Either through research or through im...

Either through research or through imagination, describe future trends in advertising?

What is risk of entry by competitors, This is what i know about Porters Mod...

This is what i know about Porters Model. It is the systematic analysis of forces in the industry environment using the Porter framework is a prowerful tool that helps managers to t

Explain valuing health care, Valuing Health Care" Please respond to the fol...

Valuing Health Care" Please respond to the following: •Determine the best way to leverage value from health IM / IT investments in today's health care environment. Provide specific

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