Production | Mastering Finished Goods Planning in Business Simulation

Summary

This video tutorial explains how to manage finished goods requirements in a juice production business simulation. Key factors like production capacity, worker availability, cash management, and juice types are explored. The process involves planning juice production, checking stock levels, and understanding the cost of raw materials. A unique feature allows users to plan production even beyond capacity, triggering material requirement planning (MRP) to generate production orders. The video emphasizes balancing production with available stock to avoid losses and ensure profitability. The tutorial provides step-by-step guidance on using the simulation tool effectively.

Takeaways

• 😀 Understand the importance of worker capacity, cash in bank, and product specialties when planning juice production.
• 😀 Navigate to 'Production' and then 'Manage Finished Goods Requirement' to begin planning juice production.
• 😀 You can edit plans from previous periods but cannot exceed production capacity when making new plans.
• 😀 The system automatically calculates total production capacity and displays available juice production limits.
• 😀 There are three types of juice to produce: Fruit Punch, Orange, and Grape, each with a specific recipe.
• 😀 Concentrate is a semi-finished product and requires filtered water to turn into finished juice for customers.
• 😀 Juice production costs are affected by the cost of raw materials, and the system calculates the average purchase price for each.
• 😀 The selling price of juice should always be above the production cost to avoid losses.
• 😀 Stock levels are automatically considered when planning production, and excess stock means no additional juice production is necessary.
• 😀 After entering the desired production quantity, you can save your plan, and the system will confirm it was successful.
• 😀 If production plans exceed current stock, the system will automatically trigger Material Requirement Planning (MRP) and generate production orders.

Q & A

What is the goal of the juice production planning in this business simulation?

The goal of the juice production planning is to achieve the best possible profit by understanding the capacity of workers, available cash, and the types of juice that the company specializes in.

What is the significance of checking the cash in the bank before planning juice production?

Checking the cash in the bank is important to ensure the company has enough funds to purchase the raw materials and resources needed for juice production.

How does the system handle production planning that exceeds the available production capacity?

If the production planning exceeds available capacity, the system will stop the process when you try to confirm your production order, ensuring that the plan is adjusted accordingly.

What are the three types of juice that can be produced in the simulation?

The three types of juice that can be produced are fruit punch, orange, and grape.

What is concentrate, and how is it used in juice production?

Concentrate is a semifinished product in the form of syrup that requires additional filtered water to turn it into finished goods. It can be either purchased or produced but can only be sold within the company, not to external customers.

How does the 'C recipe' feature help in the juice production process?

The 'C recipe' feature provides detailed information about the raw materials required to produce both concentrate and finished juice, including the cost and quantity of each ingredient needed.

Why is it important to understand the cost of raw materials when planning juice production?

Understanding the cost of raw materials is crucial because it directly affects the production cost of each juice bottle. Lower raw material costs help reduce overall production costs, improving profitability.

What happens when the production plan is lower than or equal to the existing juice stock?

If the production plan is lower than or equal to the existing juice stock, the company does not need to produce more juice because the existing stock meets the planned amount.

How does the system calculate the cost of producing one bottle of juice?

The system calculates the production cost by considering the cost of each raw material required for juice production, factoring in the purchase prices and the quantities of materials used to make one bottle of juice.

What happens when the production plan exceeds the available stock?

When the production plan exceeds the available stock, the system automatically runs Material Requirement Planning (MRP) and generates a production order to ensure enough raw materials are available for the planned production.