Operations Management and Quantitative Techniques

Operations Management and Quantitative Techniques

The Realco Bread Master

Master Production Schedule for the Bread Maker

Master Production Schedule for the Bread Maker

Demand Management

Week 1

Week 2

Week 3

Week 4

Week 5

Week 6

Week 7

Week 8

Weekly Demand for Bread

23,500

23,000

21,500

15,050

13,600

11,500

5400

1800

Working Days in Week

5

5

5

5

5

5

5

5

MPS Daily Demand for Bread

4700

4600

4300

3010

2750

2300

1080

360

Total

32,100 Units

Inventory at the End of Last Week

7000 Units

Expected Inventory

40,000 Units

Total

47,000 Units

Forecasted Net Inventory at the End of Week 1

14,900 Units

Projected Ending Inventory and Available-to-promise Numbers

According to the approach followed by Jack in this scenario the ending inventory does not seem to be favorable for the company. It can be noticed that last week's ending inventory was 7,000 units which and Johnny was unpleased with the number of the remaining inventory. The business in which the company operates is break making and the product quality in this industry is based on three core ingredients product taste, product hygiene and product freshness. Nonetheless, it can be asserted that the freshness of an order cannot be maintained if the raw material used for the order is stocked in for weeks.

According to the analysis of company's forecasted demand for two months the total forecasted demand accumulates into 115350 units. Nonetheless, this demand is dispersed in weekly pattern and the number of units demanded decrease as the time progresses. In addition, the average daily demand for bread is 4700 units for week 1, 4600 units for week 2, 4300 units for week 3, 3010 units for week 4, 2750 units for week 5, 2300 units for week 6, 1080 units for week 7 and 360 units for week 8.

Has Realco Overpromised

According to the analysis of the figures illustrated through master production schedule, it can be noticed that Realco has under-promised for the first, second and third week as the forecasted demand exceeds the supply. Nonetheless, it can also be enlightened that Realco has over-promised for the rest of the weeks as the forecasted demand is less than supply. According to the demand pattern depicted by master production schedule, it can be illustrated that the weekly demand declines with every passing week; hence, keeping the production same in each week is not feasible for the organization. This is the core reason why Realco encountered huge amount of units in the ending inventory of last week.

Should Realco Update either the Production Numbers

According to the analysis of the master production schedule, it can be interpreted that Realco should update either forecast or the production numbers. The forecast according to the master production schedule illustrates that the demand for the first three weeks exceeds the supply and in the rest of the weeks the company would be encountering huge amount of units in the ending inventory as the demand declines with time. Therefore, it can be asserted that Realco must update its production numbers as the forecasted demand and supply pattern set by the company would not be feasible.

Comment on Jacks Approach to Order Promising

It has been analyzed from the case that Jack has adapted vague approach of order promising. Jack has been carrying out the production ...