Week 2 Assignment - Decisions for Quarter One and Quarterly Business ReviewPart I: Decisions for Quarter One. Prior to working on your Decisions for Quarter One, review the following through the Growi

General Manager FROM:

Stall Brick (Manufacturing Manager) Manufacturing Report Despite some start-up problems, in our first year, we did not lose any potential sales. We ended the fourth quarter of 2020 with 566 units in finished goods inventory . W e are charged 8% on the value of goods and materials in Inventory at the end of each quarter as an Inventory carrying cost. This is not a problem if we manage our inventories and balance our manufacturing output with sales.

Marketing and Manufacturing agree that we need a modest Inventory of finished goods to serve the market and to operate manufacturing efficiently . Furthermore, we need to coordinate a produ ction expansion plan with the marketing sales forecast. For our part, Manufacturing will coordinate the inspection lines, the raw material purchases and the labor required. We ha ve already opened discussions with Purchasing and Human Resources.

This will be a priority ef fort in 2021.

Our curren t equipme nt (6 lines) has a rated capacity of 6,000 units/year; that is 1500 units/quarter . The chart compares the quarterly level of production and potential sales for 2019/2020.

0 240 480 720 960 1.2K Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 Production Sales Production vs Demand / The graph shows quarterly units of production and sales from Q1 2019 through Q4 2020. Quarterly unit production from Q1 2019 throug h Q4 2020 was 427, 452, 566, 602, 600, 636, 700, and 1,166. Quarterly unit sales from Q1 2019 through Q4 2019 was 422, 457, 490, 517, 559, 61 1, 698, and 829.

We must grow our production capacity, but we must do it in a controlled manner. If we get ahead of demand, we will lose control of our inventories and incur potentially ruinous costs. If we lag the market and sales, we lose sales, market share and revenue. If the market explodes, we need the capacity to serve it. Environmental permits take time to process through the state''s Department of Environmental Protection and the EPA. No matter how much we push the construction of new lines, we will still have to wait up to three months for the permits to construct and operate them. If demand declines or grows slower than our capaci ty, we may find it necessary to remove inspection lines and labor . Contact Us (mailto:[email protected]) © 1991-2020, Tri Corporation. (http://www.tri-simulation.com/)