Demand Seasonality and Mitigation of Its Impact on Customised Production System: Exploring Aggregate Planning and Mutual-Outsourcing for a New Zealand Company

Ram Roy

Abstract


The seasonality of demand of XYZ Company places a significant strain on its human resources and production capability. It results in overcapacity during the 1st half, while it limits its capacity during the 2nd half of the year. This paper explores how XYZ can smooth its existing seasonal demand or the sales pattern. This paper has examined various aggregate planning techniques, but some of them have been discarded by the company based on various local factors. From discussions with the company’s Operations Manager and General Manager, a potential solution is identified for further investigation including undertaking work outsourced from other manufacturers to fill XYZ’s unutilised capacity during low demand season. Research is conducted into the aspects of outsourcing to identify the drivers behind the other companies’ outsourcing activities and how XYZ could go about securing those outsourced jobs to maintain a stable workforce within its operations. The paper recommends that XYZ should pursue mutual-outsourcing to mitigate the impact of its seasonal demand pattern. Further, a marketing brochure and a common website should be developed and promoted to bodies such as Chamber of Commerce, Manufacturers’ Associations, and other businesses to help identify the type of jobs XYZ business is capable of doing. In support of the brochure, a statement of evidence of previous jobs should be included to encourage negotiations between the prospective collaborative companies for mutual-outsourcing.

Aus. J. Bus. Sco S. & IT. Vol 2(3), July 2016, P 202-215


Keywords


Aggregate Planning; Mutual-Outsourcing; Seasonality; Customised Product

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