One of PLEs manufacturing plants supplies various engine components to manufacturers of motorcycles on a just-in-time basis. Planned production capacity for on component is 100 units per shift, and the plant operates one shift per day. Because of fluctuations in customers assembly operations, however, demand fluctuates and is historically between 80 and 130 units per day. To maintain sufficient inventory to meet its just-in-time commitments, PLEs management is considering a policy to run a second shift the next day if inventory falls to 50 or below at the end of a day (after the daily demand is known. For the annual budget planning process, managers need to know how many additional shifts will be needed. The fundamental equation that governs this process each day isEnding inventory = beginning inventory + production demand
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