manufacturing electric fans at Riordan

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The objective of Riordan Manufacturing strategic capacity planning is to ensure that adequate capacity is available to satisfy the demands of the customers in a cost effective manner. For Riordan Manufacturing, this means determining the manufacturing level required to satisfy demand for electric fans. For achieving this strategic objective Riordan Manufacturing first needs to analyze its current capacity (Allspaw, J. 2008). Next, Riordan Manufacturing needs to plan for its future by using forecasts of future business activity; it needs to determine the future system requirements.

Essentially capacity planning is the process of finding out the production capacity required to meet the changing demands. The process for forecasting used till now is estimating the demand based on historical sales of the last three years. In a dynamic environment, this forecast may prove to be inaccurate. The reason for this is that Riordan Manufacturing is undertaking several marketing activities for electric fans. In China itself, it has launched a promotion program, an advertising campaign, and selling electric fans through certain retail chains (Allspaw, J. 2008). These marketing actions are likely to have an impact on the sales of Riordan Manufacturing fans and this should be taken into consideration when making forecasts for the next year. Unless, Riordan Manufacturing capacity to make electric fans matches revised demand for electric fans there will be a shortage of fans. Further, Riordan Manufacturing intends to export electric fans from its Hangzhou plant to several countries including the USA. If adequate marketing efforts are undertaken by Riordan Manufacturing and channels of distribution are ...