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Ice House Toys Free essay! Download now

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Ice House Toys

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Downloads to date: N/A | Words: 2796 | Submitted: 21-Mar-2012
Spelling accuracy: 98.2% | Number of pages: 1 | Filetype: Word .doc

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Ice House Toys


1) Introduction ------------------------------------------------------------------------------ page 1
2) Executive summary --------------------------------------------------------------------- page 1
3) Main Capacity Constraints -------------------------------------------------------------- page 2
3.1.1) Storage Capacity -----------------------------------------------------------page 3
3.1.2) Staff capacity -------------------------------------------------------------------page 3
3.2) Resolving constraints----------------------------- ----------------------------------page 3
.3) Influencing demand to ease capacity constraints -------------------------------page 6
3.3) Impact on website--------------------------------------------------------------------page 6
3.3.1) Offering discounts --------------------------------------------------------page 7
3.3.2) Internet sales --------------------------------------------------------------page 7
3.3.3) Alternative supply options ----------------------------------------------page 7
4) Long term capacity planning issues -----------------------------------------------------page 8
5) Alternative purchasing policy --------------------------------------------------------- page10
6) Impact of Overtime --------------------------------------------------------------------------page 11

References --------------------------------------------------------------------------------------------page 12



A major consideration for any manufacturing or service company is optimal use of its resources –materials, staff, equipment to ensure that it meets the demand for its products and services. Companies have had to grapple with their supply chains in order to meet this key aspect of their business. They have to ensure that the internal and external processes are efficiently aligned while maintaining flexibility in operations to gain competitive edge.

The objective of this report is to analyse the problems of the company concerning inventory, capacity planning and control. The company is experiencing capacity constraints and unable to maximise opportunities for growth and profit. The Christmas season is the challenging for the company and would be the focus of our analysis and resolution.

Inventory seems to be a way to gain gross profit in view of discounts enjoyed while on the other incurring costs for holding the inventory.

We will use the sales forecast, cost analysis, and cost of operating the warehouse for the peak period to proffer recommendations as to why the company has to make sacrifice of employing more part time staff on a five day week to ensure that the bottleneck is reduce for output of inventory to increase. This is believed to be the best way to solve the capacity constraints.

1. Capacity constraints and Impact of projected sales target for Christmas 2000.

IHT currently faces two capacity constraints in their operations- storage capacity and Christmas season staffing levels the antecedent effect on the workers in the packaging department, which comes to a head during the company’s peak season i.e. Christmas.

A capacity constraint has been described as the part of an organisation’s process, facility, staff that exceeds its ability to add any value to the process or operations. At this point the process or facility will not be able to add any value beyond the capacity it can handle given the circumstances or limits of the facility or process. (Slack et al, 2002)

In view of this, it can be inferred that the capacity constraint for IHT is the storage or warehouse space for its inventory, as well as the staff in the packaging unit or process.

1.1 Storage capacity constraint: the facility constraint for storage of inventory is a consequence of the amount of storage ...

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