Question

Scheduling
Part I:
Required: Provide a monthly production schedule for the fiscal year beginning January 1, x1
based on the following information.

Otter Land manufactures and sells sea otter plush animals locally year round, but most
are sold during the summer months when the Water World park opens for water shows and rides.
Otter Land follows a policy of stabilizing employment for the core manufacturing work force
throughout the year. Management believes that without this policy, the skilled workers who give
the sea otter toys their special personality would quit. Therefore, the minimum production is
50,000 toys per month. By adding temporary workers, production can be increased to as much
as 150,000 toys per month; however, holding inventory longer than absolutely necessary is
against company policy. It is an inefficient use of resources. (Hint: note the minimum and
maximum production capacity.)
The inventory on both December 31, 20x0 and December 31, 20x1 must be 60,000
finished toys. Each monthly ending inventory must equal or exceed the next month’s sales
projections. The sales forecasts for the next fiscal year are based on company history, tourism
trends, population, age of the population, and disposable income.
Sales projections by month, in terms of numbers of toys, are as follows:
January, 20x1 60,000 July 200,000
February 60,000 August 150,000
March 120.000 September 100,000
April 80,000 October 50,000
May 100,000 November 60,000
June 200,000 December 100,000

Answer 1

Monthly Production Schedule:
					Note:
	Sales	Production	Balance		Addition/Short
Opening Bal.			60000
Jan	60000	60000	60000
Feb	60000	120000	120000
Mar	120000	130000	130000		50000
Apr	80000	150000	200000	Maxi Prod.	50000
May	100000	150000	250000	Maxi Prod.	50000
Jun	200000	150000	200000	Maxi Prod.	-50000
Jul	200000	150000	150000	Maxi Prod.	-50000
Aug	150000	100000	100000		-50000
Sep	100000	50000	50000
Oct	50000	60000	60000
Nov	60000	100000	100000
Dec	100000	50000	50000
Closing Bal.			50000