Covolo Diving Gear: Production Strategies
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Covolo Diving Gear is a manufacturing company which deals in making Gauge sets. As a management tool the company has adopted sales and operations planning as way of aligning and synchronizing its functions. This is envisaged in a master production scheduling whose purpose is to schedule items for on time completion. The MPS is aimed at meeting customers' order delivery dates, attaining minimum production costs, and avoiding over capacity or under capacity in the facilities of production.
In question one it requires a level production plan for Covolo Diving Gear. This plan's approach assumes that the amount produced is constant all throughout the planning horizon (Palmatier & Crum, 2003). This makes it an appropriate tool for managers since one is not forced to hire or lay off staff. Any deficits between planned production and anticipated demand are filled by stocks and backorders. In order to avoid stock outs or overage, Covolo Diving Gear can exercise a pure chase plan which ensures that workforce level is adjusted accordingly to eliminate carrying inventory from one period to another.
In chase plan we only need to produce what is required as per orders. There are no inventory carrying costs (Ross, 1996). There are also no backlogs and therefore customers are able to get their orders at the required time.
In question two there are concerns that one is not able to forecast for a longer period. These concerns are taken care of in the sales and operations plan which considers the whole planning horizon which particularly addresses focuses on all bottlenecks. Any shortages during the planning horizon can be addressed by stocks and backlogs.
In question three the comparison of laying off a worker against hiring and training a new staff has been considered and found out that the latter is quite expensive. It is not advisable to keep on hiring staff since the actual cost compared to leaving idle staff at times of low demand is higher.