The handling of seasonal demand
B: Ensure a sufficient amount of work for the low season
D: Accept any order with positive throughput
A: Make money
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C: Ensure exploitation of the demand in the high season
D': Only accept orders with a T/CU higher than some level
In order to Make money we must Ensure a sufficient amount of work for the low season and in order to Ensure a sufficient amount of work for the low season we must Accept any order with positive throughput. But, in order to Make money we must also Ensure exploitation of the demand in the high season and in order to Ensure exploitation of the demand in the high season we must Only accept orders with a T/CU higher than some level. we can't both Accept any order with positive throughput and Only accept orders with a T/CU higher than some level.
|D-D'||1. There are orders with positive throughput below the desired T/CU level|
2. If we go after high volume-low price orders during the low season, they will end up being delayed by customers so we have to make them during the high season.
2. Any way that we can secure that orders are ready for production in the low season only, will enable us to go after the lower T/CU orders while not jeopardizing the output in the high season.
|B-D||1. There are not enough high T/CU orders to fill capacity during the low season.||1. We might be able to find more high T/CU orders if we had more salespeople.|
|C-D'||1. We don't have enough capacity to fulfill demand in the high season.|
2. Capacity cannot be scaled to accomodate the increased demand.
2. If we can scale capacity with temporary workers, which costs less than what we earn on the low T/CU orders, we can accomodate the demand.
|A-B||1. To recover our costs in the low season, we need to keep production busy with customer orders.|
2. We cannot produce more products for stock.
3. Lowering our costs means firing some of our workers.
|2. Finding a market that we can serve with stock products would allow us to keep working during the winter.|
3. Finding some way to neutralize labor cost during winter (like letting companies with reversed seasonal demand rent them OR finding another business with reverse seasonal demand that we can compete in).
|A-C||1. When there's an internal constraint we can make more money by getting the orders with the highest T/CU.|