Global Supply Chain Management Assignment: Fine Fruit Cake Co & Human Resource Inc

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GLOBAL SUPPLY CHAIN MANAGEMENT Q2. FINE FRUIT CAKE COMPANY A. Monthly and annual capacity for fine country fruit cake company. 1. Calculations . a. In calculating the monthly and annual capacity, the following assumptions have been made: • The Company works for five days each week • There are four weeks in each month • The opening stock of 100 cakes of each size on 1st of January is not considered while making the calculations b. From the question, we know that all production is done in batches of 10 kg of only one size of cakes at a time. Therefore we can either have a batch of ten cakes of 1kg each or 5 cakes of 2 kg each. If we assume that the…show more content…
In the case of Fine Fruit Cake Company, we know that the company’s policy is not to stock cakes more than 3 months old. We also know that available storage space is for about 3000 kg in the cool room. To evaluate possible reasons for the company having to sell stock at reduced prices, we need to calculate whether accumulated stock exceeds capacity, resulting in lack of storage space- if production was maintained at a steady rate while sales diminished, there could have been a reduction in storage space requiring the company to sell its products at a reduced price. If we assume an optimum total monthly production capacity of 800 Kg (400 Kg each of 1 kg and 2 Kg cakes), the accumulated production situation for the year would present as in Table 3 below. As an example, the net stock for the month of January is calculated by adding opening stock (this was obtained from information in the question- since the company had 100 cakes of each size) to the monthly production, and subtracting the sales from this total as: (Opening stock + Production) – Sales =Net stock. The net stock for the previous month is then carried over to the opening stock for the following month. Table 3: Net stock and age of stock in months for the year 2011 WEIGHT OF CAKES (KG) MONTH OF PRODUCTION, 2011 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC OPENING STOCK

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