Question

ase 2 A firm has been started by a diary famer to produce and retail ice cream directly to the public. All its ice cream is sold through its own retail outlet, situated next to its farm, as it does not want other retailers to make profits from its products, and wants to ensure strict quality control all the way through from production to sales to the end customer. It can make reasonable predictions of the demand it faces up to about 6 weeks into the future, and it can vary the capacity of both its production and retail service operations by employing staff, or redeploying staff to and from duties on the farm. a) Exhibit 3 shows the expected demand for the ice creams, in numbers of units. It also shows the design capacities for both production and retail operations, and the number of units brought forward into the period being forecast. You should note that when the ice cream has been produced it is refrigerated for a period of at least 1 week before it can be sold, to ensure optimal maturing. Exhibit 4 shows historical levels of design capacity and actual capacity that have been achieved at various times in the recent past. Analyse the firm's capacity in both production and retail operations in relation to the expected demand. You should determine where there are surpluses or shortages, and clearly state any assumptions you need to make. You should also show profiles of the number of customers waiting for ice creams at the end of each working day. You can analyse the two operations independently: that is, you can assume when analysing production capacity that the retail operation will be able to meet consumer demand; and when analysing retail capacity you can assume that the production operation will be able to provide all the product that the retail operation can use

Answer 1