Supply Chain Management

 

single Excel file with your solutions and comments.
Black Eagles is one of the biggest manufacturers of toys. Managers at Black Eagles are
working on planning their demand and supply for the next year accordingly. Monthly demand
forecast in the next 12 months is given as follows:
Month Demand
1 10,000
2 11,000
3 15,000
4 18,000
5 25,000
6 26,000
7 30,000
8 29,000
9 21,000
10 18,000
11 14,000
12 11,000
Capacity at Black Eagles is managed by the number of machine operators they hire. The
company works eight hours a day for 20 days in a month with a regular operating shift. Any
time beyond that is considered overtime. Regular time pay is $15 per employee and overtime
is $22 per hour. Each employee can work overtime up to 20 hours per month. Black Eagles
currently has 250 employees. Two labor hours are needed to produce a toy. The inventory cost
is $3 for a month. Materials cost is $40 for a toy. The retail price of a toy is $125. It is assumed
that no stockouts are allowed and the starting inventory in January is 5,000 units and the desired
ending inventory in December is also 5,000 units.
Note: The cost of hiring a new labor is $1,000; while the cost of laying off a labor is $2,000.
No stockout and no subcontracting is allowed.
According to the market study, a promotion dropping prices by 1% in a given month will
increase salesin that month by 20%, and bring forward 10% demand from each of the following
two months.
a. [50 Points] What is the optimal production plan for the year if we assume no
promotions? What is the annual profit from this plan? What is the cost of this plan?
b. [30 Points] Is it better to promote in April or July? How much increase in profit can be
achieved as a result?
c. [20 Points] If toys are sold for $250 instead of $125, does the decision about the timing
of the promotion change? Why?

 

Sample Solution

wever Fielder’s description of how situational factors affect the leadership style required for the situation is extremely useful in understanding the fundamentals of leadership (Pettinger, 2007). Chelladurai in his Multi Dimensional Model of Leadership, expands on much of Fiedler’s theory but in a continuum based approach, in which the leader can adapt their leadership style to fit the situation (Chelladurai and Madella, 2006). Chelladurai’s theory is taken from sports psychology but can be applied to an organisational scenario. It provides a much more empirical categorisation of task structure, clearly differentiating a plethora of situations that require certain leadership styles for success. Chealldurai found three characteristics that affect the leadership style required for a situation, called antecedents, they mainly expand upon Fiedler’s situational factors and leader – member relations and ultimately affect how a leader should behave towards a situation. The first are situational characteristics, the environment in which the leader must perform, the second are leader characteristics, the experience, personal qualities and skills of the leader, and the third are member characteristics, the motivation, skill and experience levels of group members (Chelladurai and Madella, 2006). The situational characteristics and member characteristics have a required behaviour to ensure maximum group performance, they also have a preferred behaviour to ensure the satisfaction of group members, if the leaders actual behaviour matches both the required behaviour and preferred behaviour of the situation the consequence is maximum group performance and satisfaction. However, if the group are not performing and achieving goals or are not satisfied or both, then the leader is able to amend their actual behaviour to improve this. Leaders able to monitor performance and satisfaction, and understand what is required to amend the situation will achieve optimum group performance in Chelladurai’s model.
The one limitation of Chealldurai’s model is that it assumes the leader is in a position of complete positional power over the group, and can implement any leadership style of their choosing without constraints. Positional power is the authority and influence a leader has over a group, if the leader has positional power, they will be able to implement the leadership style they best see fit for the situation. Positional power cannot be measured or quantified, making it highly ambiguous and hard for a leader to understand whether they have it or how then can gain it. It becomes the responsibility of the organisation to have policies in place to provide leaders with some positional power, usually by establishing a clear hierarchal structure. By establishing a hierarchy, the leader is perceived by the group to be able to make demands and expect compliance from them giving the leader legitimate power (French and Raven, 1959). Secondly, by providing the leader with the ability to reward compliance and punish non compliance from the group, the leader has reward and coercive power (French and Raven, 1959). To obtain complete power over the group the leader must gain the trust and belief of the group that they are capable of success, by ensuring the group are both satisfied and meeting performance goals.

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