14. Cubby Compressors has had relatively steady sales volume for years.

The introduction of a new high-end “biscuit” model for the professional contractor market has added the potential for additional sales. The operations manager is also concerned about losing sales if product is not readily available. The current sales and operations plan is given below.

Assume that each employee can make one unit each work day. Also, assume all days-of-supply calculations are based on a 20-day month and that back orders are to be filled from current production.

a. Propose a revised production plan that brings the days of supply to the target of five days for the next six months.

b. What would the plan look like if you had a hiring freeze at 45 employees maximum and still want to achieve the target five days of supply?

c. What other options are available to not exceed the 45-employee limit and still not experience inventory shortages and related customer service problems?

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Cubby Compressors Sales and Operations Planning Spreadsheet History Oct Nov Dec Plan Jan Feb Mar Apr May Jun Sales Plan (in units) 800 850 900 900 900 900 900 900 900 Actual (in units) 826 851 949 Diff. month Diff. cumulative 26 1 49 27 27 76 Operations Plan (in units) (in employees) 800 800 800 Number working 34 42 23 19 * 900 900 900 900 900 900 42 45 43 39 45 41 41 19 20 21 23 20 22 22 days/mo. Actual (in units) 758 842 824 Diff. month -42 42 Diff. cumulative 0 24 24 Inventory Plan (in units) 150 100 0 -52 -52-52 -52 -52 -52 Actual (in units) 82 73 -52 Days of supply 1.9 1.5 -1.2