Megansco Footwear located in Liliw, Laguna is owned by Julieta Loma Scott. It manufactures and sells shoes and sandals as well as bags from Bicol, some of which are supplied to them by her cousin from within the area. Their target market consists of wholesalers who are their loyal customers and the usual walk-in customers. They also have clients from malls in the Visayas region and northern Luzon who order 300-500 pairs every two weeks.

The production of shoes and sandals is done in the house of Julietas parents and they have four workers who make the required footwear manually. With a shoe manufacturing lead time of about two weeks, working days are from Mondays to Saturdays. Julieta buys the raw materials from Marikina, Bian, and Divisoria. She places her raw material orders with her suppliers who in turn deliver the materials to her after a week. Three workers who make the footwear report to Julietas shoe manufacturing facility regularly.

The Tsinelas Festival is coming in two weeks time and they already have committed to a production schedule of 250 pairs of sandals with this crowd-drawing festival in mind. Their loyal client, a mall in the Visayas placed an order of 350 pairs of sandals which they also need to deliver in two weeks.

Table 1 below shows the processes needed in making a pair of sandals with the corresponding predecessor activities, time duration and cost.

Guide Questions:

1) Julieta thinks she has a capacity problem. Do you agree or disagree? Show detailed proof to support your answer.

2.) What capacity-related alternatives, if ever, are open to Julieta? Which alternative do you recommend? Justify.

Table 1. Summary of Shoe-Making Steps, Predecessor Activities, Time and Cost Estimates