Proactive Operations Management Assignment Help


With a proactive strategy, management anticipates future growth and builds the facility so that it is up and running when the demand is there, as seen in Exhibit 7.7A With the strategy, opportunity costs resulting from lost sales due to an inability to meet demand are minimized, although the firm does have to allocate fixed costs over a relatively small volume of units during the plant’s initial period of operation. This strategy is most compatible for a plant where the labor costs are a significant portion of total manufacturing costs, such as in low-volume assembly operations (e.g., footwear manufacturing.

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