Solved: Climate Control Inc makes expedition quality rain

gear for outdoor enthusiasts

Climate Control, Inc., makes expedition-quality rain gear for outdoor enthusiasts. Management
prepared a forecast of sales (in suits) for next year and now must prepare a production plan.
The company has traditionally maintained a level workforce strategy. All nine workers are
treated like family and have been employed by the company for a number of years. Each
employee can produce 2,000 suits per month.

At present, finished goods inventory holds 24,000 suits. The demand forecast follows:

Use the Sales and Operations Planning with Spreadsheets Solver in OM Explorer or develop
your own spreadsheet models to address the following questions.

a. Management is willing to authorize overtime in periods for which regular production and
current levels of anticipation inventory do not satisfy demand. However, overtime must be
strictly limited to no more than 20 percent of regular-time capacity. Management wants to avoid
stock outs and backorders and is not willing to accept a plan that calls for shortages. Is it
feasible to hold the workforce constant, assuming that overtime is only used in periods for which
shortages would occur?

b. Assume that management is not willing to authorize any overtime. Instead, management is
willing to negotiate with customers so that backorders may be used as a supply option.
However, management is not willing to carry more than 5,000 suits from one month to the next
in backorder. Is it feasible to hold the workforce constant, assuming that a maximum backorder
of 5,000 suits may be maintained from month to month?

c. Assume management is willing to authorize the use of overtime over the next four months to
build additional anticipation inventory. However, overtime must be strictly limited to no more
than 20 percent of regular time capacity. Management wants to avoid stock outs and
backorders and is not willing to accept a plan that calls for shortages. Is it feasible to hold the
workforce constant, assuming that overtime is only used in months 1-4?

If not, in which months would additional overtime be required?

ANSWER
https://solvedquest.com/climate-control-inc-makes-expedition-quality-rain-gear-for-outdoor-
enthusiasts/

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