Company Analysis
Machine hours for each product of the CPC changed between 1992 and 1993 as the Product Manager attempted to reduce overtime costs. Table 1 below shows estimated machine hours per machine for each product in 1992, and Table 2 shows the same information for 1993.
Table 1 - Estimated Machine Hours for Per Machine per Product - 1992
Product I Product J Product K Total Hours per Machine
Machine A 929 769 308 2006
Machine B 797 962 256 2015
Machine C 558 641 385 1583
Total Hours
per Product 2284 2372 949 5604
Table 2 - Estimated Machine Hours for Per Machine per Product - 1993
Product I Product J Product K Total Hours per Machine
Machine A 769 615 615 2000
Machine B 659 769 513 1941
Machine C 462 513 769 1744
Total Hours
per Product 1890 1897 1897 5685
As you can see from the data above total machine hours increased from 1992 to 1993.
This occurred as a result of the Production Manager attempting to reduce overtime by limiting each machine to a maximum of 2000 hours. So machine hours for Product I and J were reduced, and machine hours for Product K were increased. But the total number of units produced in 1993 actually decreased (see Appendix 1 for further detail). So compared to 1992, more machine hours were utilised in 1993, to produce less units.
As a result of this change in assigning machine hours, several sales orders were unable to be fulfilled because they could not be produced in the normal delivery time. These were predominantly orders for Products I and J, although a few for Product K were missed as well.
The data above also highlights that machine capacity is a real issue for this company. In 1993 the...
This is very short
this is not very good
0 out of 0 people found this comment useful.