Question

3. You are the manager of a manufacturing plant. The plant is having trouble making a profit, deliveries are always late, customers are dissatisfied, and the workers in the plant are upset and are threatening a strike. Your boss will close the plant if you don't do a lot better by cutting costs and increasing sales. Besides that, your spouse may divorce you and your children are failing in school. Your staff has come up with the following action plans. Comment on the advisability of each plan in terms of Throughput, Inventory and Operating Expense. I want more than a direction of change. I want a reason for the change. a. The plant supervisor suggests that you should tell each worker that a minute of pay means a minute of work. Make spot checks on the plant floor and if a person is idle his or her pay will be reduced. b. The process engineer suggests that you find the most labor-intensive operation that the plant performs. Reduce costs by automating the operation. c. The purchasing manager suggests that you reduce costs by cutting inventory to the bone. Don't order raw materials until the last possible minute. d. The marketing manager suggests that you increase sales by reducing the prices charged for your products. e. The facilities manager suggests that you reduce costs by eliminating excess capacity of the production facilities. All departments in the plant should have the same capacity. f. Your spouse suggests that you embezzle company funds and run away to Brazil so that you can devote some quality time to the family.

Answer 1

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