Case Problem EZ TRAILERS, INC.
EZ Trailers, Inc., manufactures a variety of general-purpose trailers, including a complete line of boat trailers. Two of their best-selling boat trailers are the EZ-190 and the EZ-250. The EZ-190 is designed for boats up to 19 feet in length, and the EZ-250 can be used for boats up to 25 feet in length.
EZ Trailers would like to schedule production for the next two months for these two models. Each unit of the EZ-190 requires four hours of production time, and each unit of the EZ-250 uses six hours of production time. The following orders have been received for March and April:
|
Model
EZ-190
|
March
800
|
April
600
|
|
EZ-250
|
1100
|
1200
|
The ending inventory from February was 200 units of the EZ-190 and 300 units of the EZ-250. The total number of hours of production time used in February was 6300 hours.
The management of EZ Trailers is concerned about being able to satisfy existing orders for the EZ-250 for both March and April. In fact, it believes that this goal is the most im- portant one that a production schedule should meet. Next in importance is satisfying exist- ing orders for the EZ-190. In addition, management doesn't want to implement any production schedule that would involve significant labor fluctuations from month to month. In this regard, its goal is to develop a production schedule that would limit fluctuations in labor hours used to a maximum of 1000 hours from one month to the next.
Managerial Report
Perform an analysis of EZ Trailers' production scheduling problem, and prepare a report for EZ's president that summarizes your findings. Include a discussion and analysis of the following items in your report:
1. The production schedule that best achieves the goals as specified by management.
2. Suppose that EZ Trailers' storage facilities would accommodate only a maximum of 300 trailers in any one month. What effect would this have on the production schedule?
3. Suppose that EZ Trailers can store only a maximum of 300 trailers in any one month. In addition, suppose management would like to have an ending inventory in April of at least 100 units of each model. What effect would both changes have on the production schedule?
4. What changes would occur in the production schedule if the labor fluctuation goal were the highest priority goal?