The Cataumet Boats Case Solution
Question-5
The various tasks that would performed could be divided into two main parts which are the
- Time sensitive activities
- And the random activities that could be done any time (not time sensitive activities)
By using these two activities, we need to determine the total labor hours that are required to complete over a year. For this purpose, we have assumed that the average time for task one is one week while for task two is two weeks. In addition to this, the total number of weeks required by task one in a year is 10 because the task will be performed 10 times in a year by using the one labor so, the product of time and week (10* 1) will be 10 in total. Furthermore, for task two, the total time will be 16 weeks because the task will be performed 8 times in a year by using the two labor so, the product of time and weeks (8 * 2) will be 16 in total.
Total labor hours in a week = 40
Total weeks for task one = 1
Total weeks for task two = 2
Total labor for task one = 1
Total labor for task two = 2
The total labor hours for the task one is = 40 * 10 * 1 = 400 hours
The total labor hours for the task two is = 40 * 16 * 2 = 1280 hours
Total hours for these two tasks = 1280 + 400 = 1680 hours
The total labor hours that are currently available in the company for a year is
Total number of employees = 11
Total employees hour in a week = 11 * 40 = 440
Total weeks in a year = 52
Total available labor hours in a year = 440 * 52 = 22,880
So, the total hours used for these two tasks will be 7.34 percent of total labor hours in a year.
Question-6
Schedule Full-Time Workers for Overtime
Total available labor hours in a year for 11 employees = 22,880
Total extra labor hour = 1680
Overtime hourly rate for full time employees = 34 $
Average hourly rate for full time employees = 24 $
Total cost for full time employees = 22,880 * 24 = 549,120
Total overtime hours for full time employees = (60 – 40) * 52 = 1040
Total hours difference = 1680 – 1040 = 640 hours
Total cost for overtime employees = 1040 * 34 = 35,360
Total cost for overtime employees by seasonal workers = 640 * 24.75 = 15,840
Total cost = 549,120 + 35,360 + 15,840 = 600,320 $
Schedule Seasonal Workers for Overtime
Total available labor hours in a year for 11 employees = 22,880
Total extra labor hour = 1680
Overtime hourly rate for seasonal employees = 24.75 $
Average hourly rate for full time employees = 24 $
Total cost for full time employees = 22,880 * 24 = 549,120
Total cost for overtime employees = 1680 * 24.75 = 41,580
Total cost = 549,120 + 41,580 = 590,700 $
Schedule Seasonal Workers for Meet Demand
Total available labor hours in a year for 11 employees = 22,880
Total extra labor hour = 1680
Overtime hourly rate for seasonal employees = 21.60 $
Average hourly rate for full time employees = 24 $
Total cost for full time employees = 22,880 * 24 = 549,120
Total cost for overtime employees = 1680 * 21.60 = 36,288
Total cost = 549,120 + 36,288 = 585,408 $
Question-7
For paint, there is a need of 25 hours per boat and there are total of 360 boats. For this, the company will hire two additional full time workers. So, the cost of hiring two full time additional workers will be;
Total hour per week = 40
Total weeks in a year = 52
Total hour per worker in a year = 40 * 52 = 2080 hours
Total hour for two workers in a year = 2080 * 2 = 4160 hours
Average hourly rate for full time employees = 24 $
Total cost for additional two full time workers are = 24 * 4160 = 99,840 $
Question-8
Other than the costs, there are several other factors that the APP would help the company to achieve more and considerate fluctuations in the market. Aside from helping Cataumet Boats cut labor costs, APP can also decrease barriers to entry in the Leadership & Managing People industry. With increased competition, costs have come down. With lower rates, Cataumet Boats can invest in research and development and capital expenditure to improve their core competitive advantage. Aside from the financial benefits, APP can also help Cataumet Boats target international markets with less capital restrictions.A good aggregate production plan should be flexible enough to address seasonal demand fluctuations. Having a flexibly-scalable APP will allow for flexibility when hiring employees. By allowing workers to shift from one task to another, Cataumet Boats can save money while keeping its level of service high. In addition, a well-structured APP will help the company avoid hiring costly functional specialists.
Question-9
Jaime Giancola, an MBA student at the University of Michigan, recently completed an operations management class where she studied APP. She believes that her family's business, Cataumet Boats, can benefit from APP. The business, which was started by her grandparents and is now run by her mother and uncle, has a high demand season. She recommend to her mother and uncle to aggregate APP. She said that APP will allow Cataumet to better manage its labor costs while maintaining a high level of customer service. She said that the APP will help Cataumet Boats' business plan. The company's cash cycle is long and it needs to be shortened by 12% to improve profitability. Its decision-making process is very deliberative. Previously, Giancola was slow to react to competition and has failed to respond to new entrants. However, she believes that with an APP, the company can anticipate demand patterns and increase its profitability.
She recommend that plan to her uncle and mother, because she wanted to increase the financial plan of the company by dealing with the arisen fluctuations and competitions........................
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