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Final Paper Week 5

BUS307

Instructor

06/27/2011

Bread making is serious business

Case Study 1 pg. 513

When developing a master production schedule, it helps businesses to predict whether or not their production meet demands. Businesses can have a surplus of product and lose money that deals with the holding cost. They can fall short of their demands and in the process all their customers could experience delays in receiving their product. The Realco Breadmaster Company has been introduced to a new breadmaker which is expected to help Realco increase their product sales. Questioning the cost and efficiency of the new breadmaker, owner, Johnny Chang, wants to develop an MPS.

After developing an MPS for Realco, its visible Realco will be able to meet their customer’s demands based on the eight weeks of promised shipments provided. But after the eighth week, they will have a large amount of product leftover. Johnny Chang, , also mentioned that the starting inventory of 7,000 breadmakers was too high, so if they ended week eight with 51,650 the company should be on alert that they are over-producing. End the end they haven’t overpromised since they were able to meet their.

“Nearly all orders can be filled within two weeks, so we promise them three weeks. That gives us a cushion, just in case.” (Bozarth & Handfield, 2008 pg. 513). The advantage for Jones’ view is that their customers will ultimately receive their product as promised; therefore the company will have a good reputation. The only disadvantage that I see to the Jones’ view is that the customers my think they are receiving their order late and the time frame is too long.

The formal master scheduling, rather than overproducing, manufacturers would be able to produce a suitable amount of breadmakers and ship them in a timelier manner. When dealing with a business, customers are always right and should never be refused a product due to the product not being there. If such things comes and the...