Parker Earth Moving Consulting Executive Summary
Parker Earth Moving Company (PEMC) is a producer of high-quality earth moving equipment used in homes and in small-business landscaping industries. PEMC must manufacture 30,000 units per month or 90,000 units for the quarter (University of Phoenix, 2011). Producing such numbers requires PEMC to use Subcontractor A or Subcontractor B and make them work 6 instead of 5 days of the week and add a third shift to their work day. In addition to making these numbers work in the amount of work days, PEMC needs to keep in mind all costs to keep minimal losses. PEMC has hired ABCS2 Consultants to provide solutions to help enable PEMC to meet its production needs and recommendations to improve productivity (University of Phoenix, 2011).
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Proper utilization of Subcontractor A and Subcontractor B manufacturing companies could allow PEMC to produce more of the Ultramover in a faster timeframe and keep the price point at the price where customers will continue to purchase the product.
Subcontractor A and B Recommendations
Subcontractor A and B are both capable of meeting PEMCs manufacturing and quality standard requirements. ABCS2 Consultants recommends Subcontractor A because of the cost and the lead time linked with producing the item. PEMC must decrease any extra cost linked with this project hence the final cost of the item stays in a range the customer is ready to pay. The additional time it takes for subcontractor A to manufacture the item is sufficient because it allows the organization to transfer some of the stock presently stored in the warehouse. PEMC also requires the extra time to make sure the aggressive prediction is precise. Maintaining too much product in storage can be a damaging problem for the organization and the extra stock will cost the organization money in storage charges and the lack of sales from over predicting will not offset the difference. The lead time advantage of subcontractor B does not meet the requirements of PEMC because the storage requests are now met by the leasing of an off-site facility. Diminishing expenses for the production of the navigational device is essential to reduce the loss of the extra expenses required for storage space and a subcontracting business.
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University of Phoenix. (2011). Parker Earth Moving Company Consulting: Customer needs and
operational performance. Retrieved September 4, 2011 from University of Phoenix, ISCOM/305
Systems Operations Management website.