Level capacity plan, Operation Management

Level Capacity Plan

The inventory size is varied keeping the workforce size and utilization of work constant. The number of workers ( working size) is kept constant throughout the time period under consideration. During months of low demand the excess units required over the units produced are taken from the inventory. The benefit of this plan is that the cost of hiring and training new. Workers is zero. Also the cost of laying off workers is zero, as the workforce size is constant. The employee morale is high due to sense of job security. During periods of low demand, there is a high inventory cost due to its large size.

2427_Level  capacity plan.png

Figure: Level Capacity Plan

Figure shows the level capacity plan of a company manufacturing a product on produce to stock and sell basis. In the first quarter aggregate demand is less than production and inventory builds up till the end of the First Quarters . in the second third and fourth quarters are inventory levels Decline because production is less than the aggregate demand. In the fifth Quarter the production is more than the aggregate demand and hence Inventory builds up again.

Posted Date: 1/30/2013 7:47:58 AM | Location : United States







Related Discussions:- Level capacity plan, Assignment Help, Ask Question on Level capacity plan, Get Answer, Expert's Help, Level capacity plan Discussions

Write discussion on Level capacity plan
Your posts are moderated
Related Questions
What is the upside for Michelle Foster if NCY succeeds? What are the professional risks she faces?

Summary of chapter 2, reading 2.1. "ONE PHILOSOPHER'S APPROACH TO BUSINESS ETHICS" in a book MORAL ISSUES IN BUSINESS 12TH EDITION by William h. Shaw and Vincent Barry.

As leaders assess the capabilities of their team members, two questions must be answered to determine how to organize work. These questions are: Can the person do the job? Will he/

A U.S. manufacturer that exports goods made at its U.S. plants for shipment to foreign markets

1- With respect to a firm's supply chain design, what are some key challenges in terms of achieving an optimal level of mass customization? 2 - Articulate key aspects of operati

Describe the eight general strategies in the business buying decision process.

Meaning and Definition of Production Management Production management is a stream of management that is associated to the production function. Production might be termed to as th

In light of today's high standard of living, why do you think that employee theft is such a widespread problem in industry?

What are the risks and opportunities of the strategies followed by Pepsi? of Coca Cola?

Should Galanz have evolved from being an OEM to being an OBM?Is Galanz structured to compete as an OEM? Why or why not?