Case No.4

...

2. Increase capacity to accommodate the demand for both product lines.

POSITIVE EFFECTS

NEGATIVE EFFECTS

1. Increase the number of products available for sale.

1. Additional costs in raw materials.

2. Additional revenue would come out from the additional finished products to be manufactured.

2. Additional work hours for craftspeople.

3. Improves efficiency in the standard line of production.

3. Additional delivery expenses.

3. Reduce inventory by deciding on good-supply chain and implementing it.

POSITIVE EFFECTS

NEGATIVE EFFECTS

1. Makes room for expansion of warehouse holdings.

1. May result to a backlash effect towards sales.

2. Saves costs of holding current inventory within the warehouse.

2. Could result to an opportunity cost in manufacturing or selling finished products.

3. Creates additional business for the company.

3. May result in additional expenses towards the new program.

4. To remake the schedule to make sure that there is not as many raw materials as work in process status.

POSITIVE EFFECTS

NEGATIVE EFFECTS

1. The schedule would best reflect the current demand.

1. Could lead to further complications due to further change.

2. Promotes time-bound standard furniture’s towards the wholesalers.

2. Requires additional monitoring of current number of work in process as well as raw materials inventory.

3. Avoids the under utilization of materials to save costs.

3. Could interfere in the current procurement of raw materials which could be disastrous in the long run.

Conclusion:

The sudden change from the traditional means of production in order to increase profits has created an opposition with the company’s original mission. The company had to diverse its manufacturing process in order to cop-up with its new clients of who have much more different perspectives and wants than their usual clientele. The case study is centered in the problem of sudden diversification upon the demand of the economy to increase sales and the possible alternatives that may be used in order to solve the new scheduling that would be beneficiary to the company.

Recommendation:

We recommend ACA’s 1 & 4, we have selected the ACAs which would increase productivity and efficiency by separating the customs and standard line of production which in turn would allow craftspeople a much more easy and less complicated environment that would in fact allow finished products to be distributed more easily. The schedule would also require change based on the separation of assembly line for both customs and standard line and would eliminate the confusion for craftspeople in manufacturing as well as answer to the high expectations of the outlet stores towards the standard furniture product.