For the next quarter, Charter Manufacturing projects the following information (in units)
July Aug. Sept.
Retail demand 8,000 8,000 12,000
Dealer demand 16,000 20,000 24,000
Shop capacity 26,000 26,000 26,000
Painting capacity 1242,000 24,000 24,000
Demand drives production for that month and cannot be carried over from one month to another. Retail customers are satisfied first.
Required:
a. Prepare a schedule that shows the number of retail and dealer units to be made and sold each month.
b. Review the above information and comment on your observations. What suggestions do you have for Charter Manufacturing?
a. July Aug Sept
Retail production 8,000 8,000 12,000
Dealer production 16,000 16,000 12,000
Total production 24,000 24,000 24,000
b. During August and September, painting capacity is a limiting factor and shop capacity is not being fully utilized.
If the company expects this demand trend to continue, Charter Manufacturing may want to
consider renting additional space beginning in August to take advantage of the increased demand and excess shop capacity at the end of the year.
You might also like to view...
Given identical data, the future value of annuity due is always greater than the future value of an ordinary annuity
Indicate whether the statement is true or false.
Which of the following is a risk of entering developing nations like India and China on a large scale?
A. Lower potential for long-term rewards B. Absence of prior foreign entrants C. Lack of control over quality D. Fear of rapid imitation of technology E. High management turnover