Question

A firm has been started by a diary famer to produce and retail ice cream directly to the public. All its ice cream is sold through its own retail outlet, situated next to its farm, as it does not want other retailers to make profits from its products, and wants to ensure strict quality control all the way through from production to sales to the end customer. It can make reasonable predictions of the demand it faces up to about6 weeks into the future, and it can vary the capacity of both its production and retail service operations by employing staff, or redeploying staff to and from duties on the farm.
b) Use cumulative charts to show the relationships between demand and capacity for both production and retail operations, and use the chart for the retail operation to estimate the maximum time for which customers are likely to be kept waiting. Comment on the results.
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Answer #1

Equilibrium Point 9 QuantityAs seen from chart, optimum point is where demand and supply matches for production and retails.

If there is deficit that is difference between the two, then there might be time lag which is shown as chart given below for sample.

1000 900 800 700 600 500 400 300 200 100 882 97 75 24 34

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