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Unformatted text preview: to carry?” For example, three months of inventory means three months of sales sitting in the warehouse. That is a policy decision. If your policy is 3 months, then your worst case sales are 9 months of sales, and your best case is 12/9ths or 4/3rds of your worst case. To get our best case, we need only multiply our worst case by 4/3rds or 133%. What do we need to do for the Rehearsal? Schedule enough production to meet your best case demand for each product. 5 Save the decisions. Under File, select Update Official Decisions. Tactic 4: Modifying Plant and Equipment What is this tactic about? Plant produces our inventory. Capacity determines how many units we can produce in a year. Automation determines the labor content in each unit. Occasionally we need to buy or sell capacity. Investing in automation reduces our labor costs. If we expand capacity or automation, we must also raise the money to pay for it. Capacity is rated as, “The number of units that can be produced in a year on first shift.” A capacity of 800 means tha...
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- Fall '06
- Business, Foundation Report