Om Case Analysis Executive Shirt Company
However both plans presented by Mike and Ike are not perfect and have scope for improvement. Mike’s plan achieves the target regular and custom shirt productions and also increases the utilization without paying people for overtime, hence reducing the cost per unit for production of shirts. However, as the manufacturing lead time is very less there is scope for increasing the batch size from 5. This would help in increasing the capacity utilization as well as decrease the idle time for the cutting machine.
Ike’s plan is faulty because the capacity regular shirts are not produced daily. An overtime of 0. 89 hours per day is required to meet the production target for regular shirts. Hence, it leads to increase in the cost per unit of reg5ular shirts. In addition to this, the capacity utilization for the custom shirts is very low (33. 87%) which is not desirable. Ike’s plan has moved too many workers from regular to custom shirts, thus reducing the capacity of regular shirts. To conclude, we would suggest that Mike’s plan is better than Ike’s plan.