Garrity industries manufactures snowboards. Alfred Castro, the CEO, is trying to
ID: 2488318 • Letter: G
Question
Garrity industries manufactures snowboards. Alfred Castro, the CEO, is trying to decide whether to adopt a lean thinking model. He expects that adopting lean production would save $98,000 in warehousing expenses and $47,000 in spoilage costs. Adopting lean production will require several one-time up-front expenditures: $11,500 for an employee training program. $38,000 to streamline the plant's production process, and $8,750 to identify suppliers that will guarantee zero defects and on-time delivery. Requirements What are the total costs of adopting lean production? What are the total benefits of adopting lean production? Should Garrity industries adopt lean production? Why or why not?Explanation / Answer
1)Total cost = 11500+38000+8750= 58250
2)Total benefit = 98000+47000=145000
3)Yes ,lean production shall be accepted as total benefit is more than total cost.
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