Topic > Eco Case Study - 3794

Al's performance led the division to record its first operating profit of the year. However, Bill Peach hadn't let them off the hook yet. He asked for better months otherwise he would carry forward the recommendation to close the plant. He specifically asked for 15% more profits than that month. On the phone with Jonas, Jonas suggested that halving the lot sizes would reduce the amount of cash tied up at any one time and ease the pressure on cash flow. They set the lot sizes according to the economic lot quantity formula; formula with incorrect assumptions. If they reduced the batch sizes, the total delivery time would be reduced and customers would receive their orders faster. They would be able to respond to the market more quickly and gain an advantage in the market which would result in more customers and therefore more sales. He applied that measure to another order from Bucky Burnside which resulted in Bucky Burnside being so pleased that he visited the plant to congratulate the workers. Al felt the measurements didn't reflect their performance, so he and Lou decided to change the basis of some measurements from the standard without the venue knowing. However, an audit team sent to the plant soon noticed that the base had been destroyed