2. Buy or sell capacity of product lines
Schedule production for each line
Buy or sell capacity of product lines
Purchase machinery to automate our facilities
Establish your workforce complement

3. Herein the Big Q is:
How good are making your goods…

4. 1) Assess your Production Efficiencies- Plant Utilization & Automation:
2) Assess your Company's HR & Labor Force Productivity:
3) Assess levels of automation on each of your production lines:

6. Page 4

7. FAIR SHARE ESTIMATES: 3-4 Rnds out:
ROW#1
FAIR SHARE ESTIMATES: 3-4 Rnds out:

8. Right-Sizing Capacity:
FAIR SHARE ESTIMATES: 3-4 Rnds out:

9. A Historical Consideration… RE: Projected Share
LOW END: 0-1 product killed repositioned or introduced
TRADITIONAL: 3-6 repositioned from High…0-1 killed…1-2 introduced
SIZE: 0-1 killed, 0-1 repositioned to Traditional, 1-2 introduced
PERFORMANCE: 1-2 killed, 0-1 repositioned to Traditional, 0-1 introduced
HIGH: 1-3 killed or repositioned to Traditional, 1-3 new products arrive in rounds 2 or 3

10. Round 3- Forecast Segment Competitive Density
LOW END: 6 products=rivalry unchanged
TRADITIONAL: 9 products, w/ 3 repositioned= increased competition
SIZE: 7 products, w/ 2 new= increased competition
PERFORMANCE: 4 products, w/ 1 new= reduced competition
HIGH: 6 products, w/ 2 new= increased competition 6 4 9 6 7

11. -Given Round 3 Scenario- How should adjust your production capacities?
Round 0-1st shift Capacity
Round 3-Unit Demand
Traditional
1800
1068
Low End
1400
2081
High End
900
668
Performance
600
823
Size
469

12. ROW#2

13. Utilize 2nd Shift?
ROW#3

14. Use of 2nd Shift?
Current
Ideal

15. Should You Run 2nd shift –when Labor Costs 50% higher?
Will we make less because labor costs are 50% higher for 2nd shift?
Another Q: If we double sales will we double our net margin?
Answer by using your proformas:
1- On production spreadsheet build 1200 units
2-On Marketing display- FORECAST 1200 UNITS
3.-ON Proforma Income statement- note NET MARGIN –
4- On production spreadsheet build 2400 units
5-On Marketing display- FORECAST 2400 UNITS
6.-ON Proforma Income statement- note NET MARGIN –

17. 2nd shift gets a free ride-only has to pay labor premium…
The Big Answer
1st shift- covers all fixed costs-
2nd shift gets a free ride-only has to pay labor premium…

18. Optimum Automation Levels?
ROW#4

19. BIG INVENTORY/ no cash– risk seeing Big Al
How Big is your Slinky?
Worst Case:
BIG INVENTORY/ no cash– risk seeing Big Al
Best case:
Lots of CASH / no Inventory -you risk stockout

20. Determining A Reasonable Spread
Want to avoid generating an ultra Conservative Worst case scenario …matched w/ an ultra Optimistic Best case scenario
Should be able to sell excess inventory
in ~betw. 6 & 16 weeks

21. Take your total inventory costs
How to measure your slinky slack--
Take your total inventory costs
$23,900M

22. Risk ~9weeks of Inventory to avoid stockout
& Divide by total variable costs of inventory sold:
$23,900M/$131,119M =.18
52weeks *.18 = 9
Risk ~9weeks of Inventory to avoid stockout

23. Evaluate Your Company’s Production Situation & Formulate Strategies to Optimize Quality & Efficiencies

24. Can I be excused my brain is full..