Capacity Management

Order Description Answer the followin" rel="nofollow">ing questions: Please use - Jacobs, F.R. & Chase, R.B. (2014) Operations and supply chain" rel="nofollow">in management. 14th global ed. New York: McGraw-Hill. Chapter 17, ‘Enterprise resource plannin" rel="nofollow">ing systems’ (pp.424-441) Question 1 A company makes standard-specification kit-cars. The in" rel="nofollow">indicative order book for the next 3 months is a forecast of 640 cars broken down as follows: January: 230 cars February: 200 cars March: 210 cars The company employs 20 full-time people who can each produce 9 cars a month at the cost of £500 per car. Inventory carryin" rel="nofollow">ing costs are £50 per car per month and stockout costs are £590 per car per month. If the company has an in" rel="nofollow">inventory of 10 cars at the end of December, develop each of the followin" rel="nofollow">ing plans and select the least expensive. Highlight any assumptions you make in" rel="nofollow">in your calculations. Plan A in" rel="nofollow">involves hirin" rel="nofollow">ing no new workers or usin" rel="nofollow">ing overtime. Any shortfalls are made up with subcontractin" rel="nofollow">ing at a cost of £675 per car Plan B in" rel="nofollow">involves workin" rel="nofollow">ing overtime with each employee producin" rel="nofollow">ing 1 extra car per month at an extra cost of £150 per car. Plan C in" rel="nofollow">involves employin" rel="nofollow">ing temporary workers on an as needed monthly basis with a hirin" rel="nofollow">ing cost of £1000 per employee and termin" rel="nofollow">ination costs of £500. Temporary employees can only produce 6 cars a month. Question 2 Why is capacity management important to an organisation? (300 words maximum) Add an 80-word reflection regardin" rel="nofollow">ing why capacity management is important to an organisation and how operations managers look at capacity in" rel="nofollow">in terms of in" rel="nofollow">input and/or outputs.