PlantOperations

PlantOperations - FACTORY OPERATIONS The Global Business...

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FACTORY OPERATIONS The Global Business Game
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Prof. Nathan Globus Shows You How Prof. Globus would like to show you how a typical factory works in The Global Business Game along with its associated financial operations . He will provide you with an overview of the production processes involved, how labor hours are generated by the plant’s worker-aided production technology and how these hours are billed and factored into the firm’s unit manufacturing costs. The professor will also deal with the effects of Quality Control efforts on product quality and Warranty work.
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Manufacturing Basics Your firm begins the game with a factory whose size is based on the number of work stations provided in your facility. This is termed “Base Capacity” and applies to a plant that is labor-intensive. The factory uses the assembly line method with workers placed at work stations on both sides of the line. Automated equipment, or Automatons, can be installed at various places along the assembly line. Each Automaton straddles the line and takes up two work station spaces previously dedicated to assembly line workers. In this fashion capital is substituted for labor.
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Generating Labor Hours A factory’s workers, and its two types of Automatons, generate labor hours of their own. These labor hours are needed for assembling the television sets scheduled for production. Factories can operate two shifts plus a 25.0% Overtime extension on the end of the second shift. The following labor hours can be produced by each manufacturing component each quarter: Labor Hour Source Hours Workers 520 Auto1s 2,080 Auto2s 2,665
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Nominal Plant Capacity Different combinations of workers and Automatons produce differing amounts of labor hours. A plant with a Base Capacity for 70 workers could produce 36,400 labor hours. This is calculated as 70 * 8 * 5 * 13 = 36,400 or 70 workers working eight hours a day for five days a week during a thirteen week quarter. If two Auto1s were added to this factory four worker spaces would be taken up by the Automatons. This reduces the number of workers manning work stations but increases the plant’s overall nominal capacity because of the Auto1’s productivity.
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Nominal Labor Hours This 70 Base Capacity plant with two Auto1s could produce from its two labor hours sources a total of 38,480 hours on one shift. Per Unit Total Workers 66 520 34,320 Auto1s 2 2,080 4,160 38,480 Units Labor Hour Source Hours Total If the company ran two shifts the total number of hours produced would be something less than 76,960 hours because second shift workers are less productive. Overtime operations would add something less than 9,620 hours.
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Actual Labor Hours The actual labor hours generated per shift can be different from the plant’s nominal labor hour capacity.
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PlantOperations - FACTORY OPERATIONS The Global Business...

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