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Monongahela Mittens Manufacturing Monongahela Mittens Manufacturing (MMM) is a medium-sized manufacturing facility that produces high quality gloves

and mittens. Its product line consists of three basic models : a driving glove (Model 101), a dress glove (Model 102), and a ski mitten (Model 103). There is a strong seasonal demand for this ski product; 70 percent of all sales occur in the four-month period from November through February. The marketing and manufacturing departments have arrived at the following production schedule (Table 1) for the next fiscal year and have asked for your comments. This schedule minimizes inventory costs, a major consideration of the firm. As a human resources manager, one of your tasks is manpower planning. This involves calculating how many people will be necessary for the firm to meet its production plans, and instituting plans and programs to insure that they will be available. There are certain assumptions you must make, based on information gathered from the industrial engineering department and your own departments records. The following pieces of information concern things that cannot be changed in the short run. 1. Standard Labor Hours: The total standard labor hours needed to produce each unit (pair) are: ________________________ Model Hours ________________________ 101 0.33 102 0.33 103 0.40 ________________________ 2. Standard workday: The union contract defines a standard workday as eight hours. Any overtime is paid at 150 percent of standard wages. 3. Time loss: Absenteeism varies by quarter. _____________________________ Quarter Percent of Actual Hours Lost _____________________________ 1 2.5% 2 1.0 3 1.5 4 2.0 _____________________________ 4. Wage Rate: The current average wage rate is $6.50/hour. Fringe benefits costs equal 15 percent of salary costs. All employees receive fringe benefits. 1

5. Production Schedule: The total annual demand for products is: Table Model 101 102 103 Total Production schedule for Quarter 1 (July - Sept.) 5,551 5,551 16,653 27,755 Quarter 2 (Oct. Dec.) 3,629 3,629 13,131 20,389 Quarter 3 (Jan. Mar.) 4,296 4,296 8,400 16,992 Quarter 4 (April June) 9,180 9,180 29,784 48,144 Total 22,656 22,656 67,968 113,280

Model 101 102 103

Number of Units 22,656 22,656 67,968

The maximum number of units that can be produced in any one quarter is: Model 101 102 103 Number of Units 9,200 9,200 30,000

The following pieces of information concern things that can be changed in the short run. You can manipulate these items, but consider the costs as well as the benefits of doing so. 1. Productivity: People do not or cannot produce at 100 percent efficiency. The standard hour figures given for production assume that a person is working continually and, therefore, do not reflect what is really going on. At this point, your department has measured productivity at 82 percent. Without the introduction of new technology or machinery, it is your best guess that productivity could be improved a maximum of 4 percent. 2. Staffing levels: Currently 21 people are engaged in the production process. The skills and abilities of all labor are interchangeable. Additional persons are not difficult to obtain, but hiring, training and layoff costs do exist.

Discussion Questions 1. If current staffing levels are maintained, are there enough employees available to allow MMM to achieve its production schedule? If not, how many additional personnel are required? What alternatives does MMM have to secure these personnel? 2. If there are too many persons during anyone production quarter, what alternatives does MMM have to deal with the surplus? Be sure to consider both the costs and benefits associated with each of these alternatives. 3. What effect will improving productivity have on staffing levels? 4. Can you suggest any shifts in production from one quarter to another that would help smooth out staffing requirements?