Parcel Guard: Keeping Up with Demand
(3 pages of text)
In May 2019, the vice-president of operations at Danby Products Ltd. (Danby) was concerned that the production facility for the company’s latest product, Parcel Guard, would not be able to keep up with demand. Parcel Guard was one of the most anticipated new products that Danby had produced in years, and if the sales estimates were reliable, the vice-president needed to start thinking about how she could adjust capacity to keep up with new orders. The new production facility was located just east of Toronto, as Danby had determined that making the product locally would enable the company to respond faster to changes in demand while keeping costs under control. In order to meet anticipated demand, the options included adding new equipment to increase the capacity of the two production lines, adding a third production line, or adding additional shifts.
This case has been developed for use in undergraduate- and graduate-level programs in courses on operations management. It is designed to teach students how to draw a process flow diagram, determine capacity utilization, adjust resources to meet changes in demand, and evaluate the costs associated with adding capacity. The case challenges students to evaluate spending money on capital or increasing variable costs. After working through the case and assignment questions, students will be able to do the following:
- Draw a process flow diagram.
- Calculate capacity and capacity utilization.
- Describe how to adjust resources to meet changes in demand.
- Evaluate the costs of adding capacity.
- Determine the costs and benefits of adding capacity through additional capital or added variable costs.
Canada; Canada, Medium, 2019
$5.30 CAD / $5.00 USD Printed Copy
$4.50 CAD / $4.25 USD Permissions
$4.50 CAD / $4.25 USD Digital Download