Product Strategy
Duff has always followed a level production strategy because Duff prefers not to fire and hire employees.
Management is open to change if there is enough of a cost benefit for the change. In order to find the
best fit for Duff you are going to try the current production plan, a chase demand strategy, and keeping a
steady work force of 20 workers using overtime and sub-contracting when needed.
#
0
25
Month Demand Item
Jan 782 Beginning inventory
Feb 887 Beginning workforce
Mar 900 Production Rate
1152 Barrels per worker/month
May 1152 Regular production cost
Jun 1331 Overtime Production cost
Jul 1568 Subcontracting cost
38
Apr
40
60
70
Aug
1567 Overtime capacity
Sep
1423 Subcontracted capacity
Oct 1111 Holding cost
Nov 930 Hiring cost
Dec 1021 Firing cost
Note: All costs are per barrel
Not > Reg
production
Unlimited
8
2000
3000
