Question

a company that manufactures bicycles received an order from a national sporting goods chain. the order was for 150 bicycles that must be manufactured in 30 days. after 10 days, 45 bicycles had been produced. the manager scheduled the employees to work overtime for two saturdays. at the end of 20 days, 110 bicycles were completed.

1. write a standard for daily bicycle production that the company must meet in order to complete the order in the required 30 days.
2. at the end of the first 10 days, what was the total variance from the number of bicycles that should have been completed?
3. what was the variance from the daily standard at the end of the first ten days?
4. what was the corrective action taken by the manager?
5. at the end of 20 days, what was the total variance from the number of bicycles that should have been completed?
6. write a standard for the daily production of bicycles for the last 10 days in order to complete the contract on schedule.
7. what should the manager do if the production level exceeds the standard during the first two of the remaining production days?

Explanation:

Step1: Calculate daily production standard for 30 - day order

The company needs to produce 150 bicycles in 30 days. So the daily production standard is $\frac{150}{30}=5$ bicycles per day.

Step2: Calculate variance at end of 10 days

The standard number of bicycles to be completed in 10 days is $5\times10 = 50$. The actual number is 45. The total variance is $50 - 45=5$ bicycles.

Step3: Calculate variance from daily standard at end of 10 days

The daily standard is 5 bicycles. In 10 days, the variance from the daily - standard is also 5 bicycles (since $5\times10-45 = 5$).

Step4: Identify corrective action

The manager scheduled employees to work overtime for two Saturdays.

Step5: Calculate variance at end of 20 days

The standard number of bicycles to be completed in 20 days is $5\times20=100$. The actual number is 110. The total variance is $110 - 100 = 10$ bicycles.

Step6: Calculate daily production standard for last 10 days

There are $150 - 110=40$ bicycles left to be produced in 10 days. So the daily production standard for the last 10 days is $\frac{40}{10}=4$ bicycles per day.

Step7: Suggest action if production exceeds standard

If the production level exceeds the standard during the first two of the remaining production days, the manager could consider reducing the overtime (if any) for the remaining days, or re - allocate resources to other tasks, or build up an inventory of bicycles.

Answer:

1. 5 bicycles per day
2. 5 bicycles
3. 5 bicycles
4. Scheduled employees to work overtime for two Saturdays
5. 10 bicycles
6. 4 bicycles per day
7. Consider reducing overtime, re - allocating resources, or building up inventory.