The Operations Management in Conwell Glass Company - Research Proposal Example

OPERATIONS MANAGEMENT Introduction: The operations management is mainly the centre for any business operation across the globe in terms of growth and development. The aggregate planning in production and operation management is of enormous significance since, it reasonably strategic planning with regards to time in business that is employed to scale the production with dynamic consumer demand. Normally, the aggregate planning is executed from 3-19 months ahead prior to production starts. This intricate by numerous diverse consumer trend that change regularly as well seasonally. The aggregate planning is a significant since; it may save or misuse a substantial value of cash depending on the nature of the methodology employed. Experientially, depicting too much production leaves surplus stock that is constantly building up the cost on holding as well as depicting too small production leaves intricacies like the expense backorder, overtime, contracting out expense and many more. In the perfect circumstance, a business may employ the predicting tool to precisely anticipate the need like the production line just makes the needed volume of items to get rid of the requirement for using the extra finance to store the stock or make the latest items. The working out of the total expense manually is tiresome, as a result, there are specific software programs software like the production and operation and operation management to work out the values from the specified numbers like the expense of hiring and laying off employees, the holding expense as well as the backorders (Lazaros Papageorgiou, 2008). The research will focus on Conwell Glass Company which employs the advanced demand predicting tool to forecast the demands of consumers changing periodically. The expense of employing as well as lying off, holding expense e.t.c will be left out when taking into consideration the workings for the total expense. we will therefore make a comparison between three diverse plans; one entailing not responding to the demand as well as producing capability of unit weekly, while the second places reliance on hire and fire of employees as required to attain the needed demand and the third is a mix of surplus stock and then changing to overtime work as required (Sio Iong Ao, 2013). Arrangement of Aggregate Plans: The aggregate plans might be categorized in many diverse criterion; one is the priority i.e. what does every plan prioritize, whether it is the varying demand or it is related with capability. There are three plans that corresponds the context. They are explained as follows. Demand Option Plans This option centre on spinning-up the demand for the business’s product in the clients. Basically theses sorts of aggregate planning centre around adhering to the production demand as demanded. At the time where the demand is more than the production, backorders are taken into consideration. Even though are expense and consumer. The challenge with demand alternative plan is that is depicting no proper approach to appraise the impact on consumer concerning their demand which makes the matching production to demand hard. The fixed employment of backorders might minimize the number of clients for they might feel tired of waiting for the arrival of their product (Production and Manufacturing System Management, 2012). Capacity Option Plans Capacity aggregate plans centre on size of the production. There are as well constituent of the chase plans chiefly due to procedures put into practice to comply with the target volume for the demand production which will as well entail the overtime production, sub-contract as well as hire and fire of employees. The aim is to reduce the stock to get rid of backorder s well as the holding expense. The difficulty with these options is that it entails the expense linked with hiring expertise and the expense of subcontract and training expense as well. Mixed Option Plans This is a mix of demand and capacity leaning aggregate plan. It entails employment of demand and capacity alternative according to individual experience as well as circumstance. Data Analysis: The provided information is valid from mid April 2015 to 7th 2016 Normal production capacity = 1890 per week Overtime production capacity = 230 per week Subcontracting production capacity = 1995 per week Additionally, the Beginning Inventory = 74 units Holding Expense = $ 0.29 per week Backorder Expense = $ 19 per week for every week late Hiring Expense = $ 5.73/pound Firing Expense = $ 15.74/pound Overtime Production Expense = $ 7.9/pound Subcontracting Production Expense = $ 9.9/pound Considering the intricacies of the case, the production and operation management software was employed inn working out the total cost from diverse aggregate plan. Such as the Smooth Production which Average the Net Demand Chase Current Demand which let Workforce differ Steady standard Time, then Overtime and Subcontracting. The key notion behind the judgment of the diverse aggregate planning is to reduce the entire cost of production to comply with the demand of the client. Because the backorder expense is [provided as observed above to be 19.9 per week, we assume it over the lost revenues in relation to dealing shortage of the production. As a result, maintaining the variables steady, every aggregate plan worked out is diverse worth for the entire cost with plan one depict the highest entire expense worth of $850 as well as plan three depict the least worth of $ 83,000. The expense breakdown has been provided in the table below (Sio Iong Ao, 2013). Subtotal Expenses Smooth Production Chase Current Constant Regular Demand Time, then OT and   Subcontracting Overtime Production 69954 56378 48185 Inventory 1385 $ - 1325 Shortage 777740 $ - $ - Subcontracting $ - 37050 33351 Hiring $ - 2545 $ - Firing $ - 8605 $ - TOTAL EXPENSES 849077 104574 82858 Plan One; Smooth Production The business didn’t employ the kind of extra inputs to improve the production to comply with the demand entailing the subcontracting as well as hire and fire of employees. Consequently, the goods were in a harsh deficit which incur a huge expense worth % 777,741$ as a result of the backorder expense which lead to worst of the 3 aggregate plan as a result of huge total expense totaling $850,000.. Plan two; Chase Current Demand The business controlled the backorder expense by getting rid of the deficit as well as hire and fire of employee to comply with the current demand. nevertheless, the production is as well maintained within the set frontier every week which is the reasons for stock holding cost. The main expense incurred was the overtime production cost of $ 56,378 as well as the cost of subcontracting totaling $35,049. It is significant to take into consideration that the pan had an expense brought down of $850,000 to %105,000. Plan three; Constant Regular Time, then Overtime and Subcontracting This is an ideal plan that the business must assume in controlling entirely the deficit while reducing the stock as well as the holding cost. The production capability was managed throughout the period because of surplus product, but it aided to get rid of deficit as well as reduce the expense by not subcontracting or having an overtime production due to high rates per pound unlike the holding cost. With just a total expense of $82860 down from the 850,000, it is the very economic attentive for the circumstance (Lazaros Papageorgiou, 2008). Conclusion: It can therefore be concluded that the business can save large amount of cash in employing the plan three options. Fixed standard time unlike the overtime as well s the subcontracting. As a result, Conwell Glass limited may employ the production capacity every week to comply with the demand as well as have surplus stock for the following week (Tsan-Ming Choi, 2011). When the demand increases, it may employ the stock to meet the demand devoid of paying too much for employees who works for overtime hours or the cost of subcontracting other production line. It can be observed from the above analysis that Conwell Glass limited has reduced drastically the following expense. : 1. Backorder expense – due to deficit as a result of surplus stock every week 2. Hire or fire expense – there are constantly sufficient products to meet the demands, 3. Subcontracting expense – because there is more stock from prior weeks, the volume of units necessary from subcontracting is minimized. 4. Overtime expense – because of the past stock being held in the sore unit the demand is needed which lead to a reduction in the volume of the product to be, manufactured under overtime production capacity. Reference list Lazaros Papageorgiou, ‎. C. (2008). Supply-Chain Optimization - Page 280. London: Cingage Learning. Production and Manufacturing System Management. (2012). Sydney: Springer. Sio Iong Ao, ‎. C. (2013). Intelligent Control and Innovative Computing - Page 201. Sydeny: Springer. Steve Brown, ‎. B. (2013). Strategic Operations Management - Page 423. New York. Tsan-Ming Choi, ‎. E. (2011). Supply Chain Coordination under Uncertainty - Page 523. London: Cingage Learning. Read More