BU395 Lecture Notes - Lecture 7: The Thirteen Chairs, Production Planning, Opportunity Cost
Document Summary
): job assignment, machine loafing, job sequencing, lot sizing, order qs. ): aggregate levels of: workforce, inventory, output, subcontracting, backorders. Influencing demand: pricing, promo, back orders, new demand: changing capacity: hiring/firing, ot/slack time, part-time workers, subcontracting, inventories. Strategies for managing demand: shifting demand into other time periods. Incentives: sales promotions, ad campaigns, offering products or services with counter-cyclical demand patterns, partnering with suppliers to reduce information distortion along the supply chain. Relevant costs: smoothing costs, changing size of the workforce, changing number of units produced, holding costs, primary component: opportunity cost of investment, shortage costs, cost of demand exceeding the stock on hand, other costs, payroll, overtime, subcontracting. Ca(cid:374)dy (cid:272)o(cid:373)pa(cid:374)y has highly seaso(cid:374)al d patter(cid:374), with peaks i(cid:374) the wi(cid:374)ter (cid:373)o(cid:374)ths (cid:894)holidays & vale(cid:374)ti(cid:374)e"s(cid:895) & valleys in the summer (watching weight & chocolate melts) Regular production cost/pound = work force = 100 workers. Cost of chase demand strategy: (400,000*) + (100*) + (50*) = ,000.
