Operations Management - Assignment Example

For this purpose, two different case studies have been analyzed. It is important for the organizations to come up with proper quality management and production management strategies, in order to make sure that the organization is able to meet the overall objectives and show high growth and increasing profits (Charvet, Cooper, & Gardner, 2008; Dahlgaard and Dahlgaard-Park, 2006). CASE STUDY: THE REALCO BREADMASTER Master Product Schedule for the Bread maker     Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Forecasted demand   20,000 20,000 20,000 20,000 20,000 20,000 20,000 20,000 Booked orders   23,500 23,500 21,500 15,050 13,600 11,500 5,400 1,800 Projected ending inventory   7,000 27,000 47,000 67,000 87,000 107,000 127,000 147,000 Master production Schedule   40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 Available to promise   16,500 16,500 18,500 24,950 26,400 28,500 34,600 38,200 The projected ending inventory gives a clear notification of extra production by production department.

The amount or units of projected ending inventory is increasing with the passage of weeks and increasing the inventory holding or maintenance cost for the company. Available-to-promise inventory number tells that the rate of holding inventory is increasing week-by-week and which causes the increment in ware house cost and inventory management cost. Realco already have excess production and has a capacity of producing more than the demand so the Realco can make promises with the customers to meet the demand with its available projected ending inventories.

Realco should improve the production level by analyzing an accurate demand from the market. Realco needs to analyze and determine the gap between the demand and supply to understand the market variations then produce according to the market requirements. This practice will reduce the cost of holding inventory and contain the organization with the balance figure of demand and supply which gives handsome profits in short term period (Barlow, 2005). Jack’s Approach to Order Promising: Jack does not have a formal production plan and he has not analyzed the demand and supply on the basis of any formulated schedule or any economic analysis.

Jack’s forecasting strategy is based on analogy which means future expectation is completely rely on past experiences, with this approach Jack make assumptions for meeting the demand. It has a benefit of availability of inventory because of excess amount of production. Benefit in a way that the ending inventory is utilizing by the Jack’s promises. On the other hand this unformulated and informal strategic planning has a dark side too which can cause a big down fall in company’s financial position.

If the demand would exceed from the production then it will be difficult for the company to meet the demand of people which will directly affect the brand loyalty and at that point competitor will fill the gap of demand and get the competitive advantage. And if the demand gets decreased with the passage of time and production level is same then the company will bear a high holding inventory cost. The formal master scheduling will design the balance structure of demand and supply by analyzing the market trends.

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