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A company makes snow blowers and lawnmowers in two separate plants. The general manager of the company has been charged to decide whether it makes sense to replace the two separate plants with a single plant that could assemble both products.

Which of the following aggregate planning options will help the general manager make this decision?

Rationale

The total cost of the combined aggregate plan, and the total costs for each of the individual aggregate plans.

This information provides a comprehensive basis for comparison, allowing the general manager to assess the financial implications of operating one combined plant versus maintaining two separate plants. Understanding both total costs enables more informed decision-making regarding efficiency and cost-effectiveness.

A (Snow blowers and lawnmowers are counter cyclical products and warrant the use of a single plant.) YOUR ANSWER

While it's true that counter cyclical products might suggest potential benefits from a combined plant, this statement lacks the necessary financial analysis required for the decision-making process. Simply stating that the products are counter cyclical does not provide concrete data about costs or operational efficiencies, which are critical in evaluating plant consolidation.

B (The total cost of the aggregate plan for the lawnmowers plant.) YOUR ANSWER

This choice only considers the costs associated with the lawnmower plant, ignoring the financial implications of the snow blower plant. Without a comparative analysis that includes both plants, the general manager cannot make a fully informed decision about whether to consolidate operations.

C (The total cost of the combined aggregate plan, and the total costs for each of the individual aggregate plans.) CORRECT

This option provides the most comprehensive and relevant information, allowing the manager to compare overall operational costs. By examining both the combined and individual costs, the general manager can evaluate the potential savings or expenses involved in transitioning to a single plant.

D (The total cost of the aggregate plan for the snow blowers plant.) YOUR ANSWER

Similar to option B, this choice focuses solely on the snow blower plant's costs without addressing the lawnmower plant. Evaluating only one side of the operation fails to present a complete picture necessary for making an informed decision regarding plant consolidation.

Conclusion

For the general manager to effectively decide whether to consolidate the assembly of snow blowers and lawnmowers, it is essential to analyze the total costs of both the combined and individual aggregate plans. This analysis provides a holistic view of financial implications, guiding the decision-making process toward the most advantageous operational structure. Without comprehensive cost data, any decision may overlook critical factors that affect the company's profitability and efficiency.

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