Meridian Water Pump Case Summary

Case Study #1
Andrew Gonzalez
Saint Leo University
MGT 417

Case Study #1
The Meridian water pump case is about a small company that produces small water pumps. There was a meeting held within the department managers that pertained to making medium size pumps for the next 6months. Arguments were recorded between the marketing and sales manager, production manager, HR manager and finance manager. It seems to me that all were pointing the finger at one another on why things couldn’t get done and each department was slowing the other down by not efficiently running their departments.
Marketing is facing backlash from unsatisfied customers as they are selling products faster than they are getting products on time.
Production is having

It also, makes the company look bad and not stable.
Finance is losing money which is due to the fact that inventory is high and the cost to store them is on the company’s dime.
A production leveling strategy is when there is a continuation of producing an amount equal to the average demand. One of the advantages to this strategy is that is results in a smooth level of operation.
Month 1 2 3 4 5 6
Forecasted Demand 600 750 1000 850 750 700

Month 1-6 if added equals to 4,650. Currently there is 50 units in inventory, ending inventory is 25 with a current worker of 20. The hiring and lay off cost is $100 each and an inventory cost of storage per unit is $5. So 4650+25-50= 4625 units. With that being said we use the formula in which total units/number of periods give us 4625/6= 770.8 units.

Month # 1 2 3 4 5 6 Total
Forecast demand 600 750 1000 850 750 700 4560
Planned Production 771 771 771 771 771 771 4626
Planned inventory (50) 221 242 13 -66 -45

1st month is 3 people which is $300, 2nd month its 10 people which is $1000, 3rd month its 20 people which is $2000, 4th month is 14 people which is $1400, 5th month its 10 people which is $1000 and the 6th month is 8 people which is $800. If you add up the cost of each month need for extra people, then you get a total of $6500 for extra man power. So let’s add up $6500 + $750 for storage you get a total of $7250.
The Hybrid strategy in my opinion would be the better solution since it combines low cost and differentiation advantages. It blends your traditional marketing with the online marketing. The Hybrid strategy in my opinion offers more of an advantage and has a fewer disadvantages. I always thought that if you can take the 2 plans and combine them and see where you can cut man hours and speed up time is a good and effective strategy. Not only that but you also save money at the same time and keep customers