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Andrew Carter Prezi

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by

Sam Sam Ching

on 1 March 2013

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Transcript of Andrew Carter Prezi

Foundation Plan B Conclusion Discussed Question Aggregate Plans
Andrew Carter ,Inc Most favorable structure is PLAN B
CLOSING Plant 2 Tay Jing Ren I08002706
Ching Sam Sam I10006301 Introduction Producing outdoor lighting fixtures in Canada.
Three plants Five Warehouses 1.Evaluate the various configurations of operating and closed plants that will meet weekly demand. Determine which configuration minimizes total costs.

2. Discuss the implications of closing a plant. Question 2 Implications of Closing a Plant Cost of termination and rehiring
Negative reputation of the company
Backorder & lost sales
Adjusting output rates
Workforce arrangement Benefits Lower fixed operating cost
Lower inventory holding cost
Increase workers utilization Unintended Outcomes Behavior Reactions Work Attitudes Organization Impacts Which plan brings the lowest cost but still meet demand. Plant 3 Plant 3 Plant 2 Plant 2 Plant 1 Plant 1 Plant 1 Plan C Plan B Plan A 3 configurations Demand Plant 3 Plant 2 Formula Production cost (PC)

= Total Variable Cost + Total Operating fixed cost


Total cost

Plan A (P1+P2)= PC(P1) + PC (P2) + Non operating cost + Distribution cost

Plan B (P1+P3)= PC(P1) + PC (P3) + Non operating cost + Distribution cost

Plan C (P2+P3)= PC (P2) + PC (P3) + Non operating cost + Distribution cost Weekly Demand Actual demand= 56,000 Plant 1 (OT)= 7,000 – 3,000
units produced= 59,000 = 4,000
Excess units= 3,000 Plan A (Plant 1 + Plant 2) Plan A (P1+P2)= PC(P1) + PC (P2) + Non operating cost + Distribution cost
[(27,000 x $2.80) + (4,000 x $3.52) + $14,000] + [(20,000 x $2.78) + (5,000 x $3.48) + $12,000] +
$7,500 + Distribution cost

= $196,180 + Distribution cost Distribution cost Plan A (P1+P2) = PC(P1) + PC (P2) + Non operating cost + Distribution cost Total cost of Plan A (Plant 1 and 2)

= $196,180 + 26,250
= $222,430 Plan A (P1+P2) = PC(P1) + PC (P2) + Non operating cost + Distribution cost Plan B
Actual demand= 56,000 Plant 1 (OT)=9000 - 7000
Units produced= 65,000 = 2000
Excess demand= 9,000 Plant 3 (OT)= 6000 - 2000
= 4000 (Plant 1 + Plant 3) Plan B (P1+P3)= PC(P1) + PC (P3) + Non operating cost + Distribution cost Plan B (P1+P3) = PC(P1) + PC (P3) + Non operating cost + Distribution cost Distribution cost Plan B (P1+P3) = PC(P1) + PC (P3) + Non operating cost + Distribution cost

= $191,280 + $26,160
= $217,440 Total cost of Plan B (Plant 1 and 3) [(27,000 x $2.80) + (0 x $3.52) + $14,000] + [(25,000 x $2.72) + (4,000 x $3.42) + $15,000] +
$5,000 + Distribution cost
= $191,280 + Distribution cost (Plant 2 and Plant 3) = [(20,000 x $2.78) + (5,000 x $3.48) + $12,000] + [(25,000 x $2.72) + (6,000 x $3.42) + $15,000] + $6,000 + Distribution cost
= $194,520+ Distribution cost Plan C (P2+P3)= PC (P2) + PC (P3) + Non operating cost + Distribution cost
Actual demand = units produced = 56,000 Plan C (P2+P3) = PC (P2) + PC (P3) + Non operating cost + Distribution cost Distribution cost Plan C (P2+P3) = PC (P2) + PC (P3) + Non operating cost + Distribution cost

= $194,520+$26,840
= $221,360 Total cost of Plan C (Plant 1 and 3) Plan C Lowest cost – Plan B, $217,440
Plan B (Plant 1 and 3), shut down Plant 2 Total cost comparison Plan A Distrust & Anxiety
High job insecurity
Low job satisfaction
Low motivation
Low Loyalty
Intention to leave
Resistance to change
Loss of key knowledge
Increased absenteeism
Shift of employee royalty Profitability
Quality
Competitiveness
Image
Stock price
Customer relation Challenges Layoff Concern of layoff considered carefully
Some Strategies to be implemented
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