The level production plan might result in the increase in the quality of the products of Polar Sports Inc because temporary staff may not perform correctly in the emergency situations and the permanent employees may also not achieve the efficiency in their work because they have to manufacture products as soon as possible to meet the targets. As opposed to this when the workers have to work in normal routines, and realistic goals are easy to make in the normal circumstances. Also, the machines in the seasonal production have to operate for long hours without any gap, the machines might not perform well, and the faults are expected to occur in the productions.
Another qualitative advantage of the level production plan is that Polar Sports Inc can give better consideration to the stakeholder claims. Because they have now more time to consider what the customers are demanding and want from the Polar Sports Inc, tackling the client’s views in a proper way could increase the profits and revenues of the organizations.
Apart from the above-stated advantages, there are many drawbacks of this approach to Polar. As per the new product manufacturing strategy, Polar manufactures the skiwear throughout the year and will sell the majority of the inventory in the short span of four months; there is a possibility of the change in the customer’s demand. Customers not only want the traditional qualities of skiwear but also want their skiwear to look in line with the current fashion trends. Manufacturing the skiwear way before the selling could expose Polar to the fashion risk because the design which they have produced might be out of fashion which could minimize the sales.
Since the products are manufactured way before the selling, it might increase the holding costs of the inventory. Polar now have to hold the stock for an extended period this might result in the growth in the holding cost of the company. Furthermore, there is also a risk that the inventory might damage in the warehouse which could also result in some unexpected losses to the enterprise. Additionally, the cash flow patterns of the company are expected to change because the outflow of the resources in the initial months will be greater as compare to the inflows in the initial months, this might cause liquidity problems for the company.
Change in strategy may also result in some operational inefficiency in the initial stages because the workers may have to change their working style and also some preliminary outflows are expected to occur as a result of the change in the production method.
It is recommended that Polar Sports Inc should adopt level production plan. The recommendation is due to the benefits they can get from this approach. Polar Sports Inc can achieve the more favorable results from this approach such as an increase in the net income and reduction in the cost of goods sold. Moreover, the cash flow position of the company is also being improved through this production plan. On the other hand, there are several disadvantages of this strategy which are described above, but the impact of the problems is lower as compare to the advantages of the approach……………….
This is just a sample partical work. Please place the order on the website to get your own originally done case solution.