A carpenter is considering options for improving the manufacturing process of his custom wood-flooring concept. He started the business as a part-time venture and wanted to increase production efficiency to accommodate the growing interest for his pine flooring design. The carpenter was unsure whether he should invest in new equipment or hire part-time labor, but he knew that either way, he would have to change the current process to ensure that capacity would meet the upcoming year's forecast-ed demand.This is part of the subset of Ivey cases and technical notes written for Introductory-Level courses.
If Sullivan hires one additional worker, how can the manufacturing operation be allocated between workers to reduce the time to manufacture each board? How will production capacity be affected without other changes to the manufacturing operation?
Repeat question 5 for hiring two additional workers.
Use the least cost approach to evaluate the proposed changes to the manufacturing operation. Which option (router, one additional worker, or two additional workers) is most cost effective? Use the profit maximizing approach to evaluate the proposed changes. What does this analysis reveal about each option?