Macdonald Refrigeration Limited
PART I 1. Characterize the dominant strategy used for each of Janet’s production plans, and provide a brief summary of the strengths and weaknesses of each.
PRODUCTION PLAN 1: LEVEL STRATEGY
Janet's first plan proposes using a stable workforce and a constant output rate. Inventories would increase during low demand periods and decrease during high demand periods.
Strengths:
* Workers are protected against forecast error * Stable work hours and increased job security lead to happier employees * Employees would not have to work as many overtime hours to fill orders because there would be substantial inventory during heavy demand months * Tasks become easier and workers more efficient because employees are doing the same jobs, which creates a stable work environment * A stable work environment can increase morale

Weaknesses: * A constant output rate will result in high and/or excessive inventory * Inventory levels fluctuate leaving the potential for high inventory carrying costs, or conversely, can result in order stock outs, backlogs and lost sales * Holding inventory could result in outdated products * Accumulated inventory leads to higher storage costs, higher insurance, and higher carrying costs like taxes

PRODUCTION PLAN 2: STABLE WORKFORCE-VARIABLE WORK HOURS
Janet's second plan holds the workforce constant, but varies the number of hours worked through flexible work schedules and overtime. By varying the hours worked, production can be better matched to demand.
Strengths:
* Overtime production is used to help increase monthly output during the high demand months * Employees are not stressed by potential firing * Regular and overtime hours are used to meet demand needed for the month without having any excess inventory * Provides continuity and avoids the