1. Operations Planning Lecture #7

2. Forecasting

3. Estimating future events Has NO value to an organization unless the forecasts are included in organization’s decision-making process

4. Contingency Planning Preparation of a course of action to meet a situation that is not expected, but that, if it occurs, will have a significant impact on the organization.

5. Contingency Planning Example: Sales plummet 20% in a quarter

6. Operations Planning Your example?

7. Contingency Planning Event could be positive A 20% increase in sales in a quarter

8. Keys to Successful Contingency Planning Identify contingent events Establish an action point Develop new strategies and plans (shhh!)

9. Identify Contingent Events A significant decline in sales A product recall

10. Establish an Action Point When sales decline at least 20% in two consecutive quarters When more than 5,000 vehicles of any single model are recalled

11. Strategies and Plans Lay off 30% of production line workers and first line supervisors Seniority? Merit rating?

12. Layout Patterns How the flow of work is laid out for efficient production and minimal “bottlenecks”

13. Layout Patterns Process Layout Product Layout Fixed Position Layout

14. Process Layout (Functional Arrangement) Manufacturing of Chairs, Tables, and Hat Racks

15. Chairs, Tables, Hat Racks Cutting Sanding FinishingAssembling

16. Process Layout Example Chairs, tables and hat racks all pass through the four functional areas, but not necessarily in the same sequence. Major advantage is economy of scale in the functional areas.

17. Product Layout As product lines increase, and/or volume increases, this form tends to replace the Process Layout

18. Product Layout Chairs, Tables, and Hat Racks

19. CHAIRSCutAssemblySandFin TABLESCutSandFinAssembly HAT RACKSCutSandAssemblyFin

20. Product Layout Example Can make a change to any product line without affecting production of other products. Major disadvantage is duplication of resources in the production areas.

21. Fixed Position Layout Product remains stationary Labor and tools come to the product

22. Fixed Position Layout

23. TV Ads

25. How Many Units to Produce? Known (or firm) orders Forecasts of demand