Optimum Production Schedule: A Case Study of Ernest Chemists Limited
Loading...
Date
2011-06-11
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Abstract
This study, which was conducted in Ernest Chemists Limited (ECL), presents a production scheduling solution for a manufacturing firm, all in an attempt to cut down manufacturing cost and increase efficiency. The creation of an optimum production schedule requires the modelling of the scheduling problem as a balanced transportation problem. An important result upon the implementation of the model is the allocation of the optimum level of production necessary to meet a given demand at a minimum cost.
The main objective of the study is to develop a quantitative model by which ECL and for that matter, manufacturing firms can meet their demand at a minimum cost. To achieve this objective the study adopted the quantitative approach in this research, by using a quantitative method to model the production problems of ECL as a balanced transportation problem, which can be solved using the simplex pivot method that makes it easy to find the Initial Basic Feasible Solution (IBFS). A balanced transportation problem is where total supply equals total demand. To find the basic feasible solution for the balanced transportation problem, the researcher used the Vogel’s Approximation method (VAM), and then improved the IBFS to obtain optimality by using the Modified Distribution Method (MODI). After collecting the necessary data for the study, with an interview guide, the researcher came out with the optimum production schedule for ECL by using the Quantitative Manager for windows statistical software. The research revealed that, the company incurred a regular production cost of GHS 6,095,844.00 and an overtime cost of GHS 3,371,832.00, giving a total production cost of GHS 9,467,676.00 for producing 695,311cartons of the Big Joe pain reliever for the year, which were not all demanded within the period under review, without the optimum production model. With the model, the company required 596,695 cartons, at the cost of GHS 7,808,011.00, to meet its demand for the year instead. The researcher, therefore, recommends the usage of the proposed model to the management of Ernest Chemists Limited, to determine the optimum level of production to meet a given demand at a minimum cost.
Description
A Thesis submitted to the Institute of Distance Learning, Kwame Nkrumah University of Science and Technology in partial fulfillment of the requirements for the degree of Commonwealth Executive Masters in Business Administration