Noram Foods

Noram Foods Noram Foods is considering changing their current policy on package pitch measurements. The current policy states that 95% of packages ar to be greater than the stated net weight. However, management believes a more accurate reign policy could swerve costs for Noram foods while insuring net weight does not fall on a lower floor the stated amount. Current issues Specifically regarding the pre-cooked cereal line Noram Foods has initiated the 95% weight policy to ensure stated weight specifications atomic number 18 met.This relatively high percentage is imputable to annexd regulations, undeveloped technology, and negative consumer response towards under weighted packages. This has motivated Norman to establish reputability by choosing this control policy. additive considerations include * Addressing flexibility of a 95% exemplar * Updated, precise technology is expensive What is the ROI? Is there on marginal value added? * safekeeping norms within government specif ications * Preservation of positive company reputation Lower product deviation without falling under stated weight * Overweight packages creates high cost and decreased profit margin * Underweight packages leads to consumer and governmental reaction and inefficiency due to under-utilization of capacity Current Policy Analysis Option 1 go forward Current Control Policy(=95%) With Option 1, Norman Foods will be able to maintain the 95% weight policy and seek cost diminution in another area to increase their profit margin. Potential Cost Reducing Opportunities * Reduce the rotation schedule of control promoters i. . rotate every ? day instead of every ? hour * Leads to improvement in efficiency due to less shifting of human resources * Increased total output * Mid-shift change could sanction control operators dealing with redundancy * Seek possible technological improvements with the weighing instruments * Decrease inefficiency Potential Consequential Issues * Probable high turno ver rate to due mundane * Could led to an increase in HR costs due to recruiting and training new people Option 2 Reduce current standard ( 95%) Graph 1 Retrieved from www. ublicecon. com With Option 2, Noram Foods would be required to test and analyze various percentage points below the current 95% standard and, as Graph 1 demonstrates, doing so until an equilibrium is achieved between costs incurred and control not falling below LCL. Possible Consequential Issues * Reducing the current standard would result in a decrease in standard deviation * Increased risk of falling below the lower control limit * Additional problems may be created * Additional value through cost reduction is added through the rectification of arising issues.Our Analysis Moreover, the company shuts down the operation when outliers fall below the LCL. However, when the process produces outliers that are above the UCL, the machine continues to operate. Noram Foods should develop a cost/benefit analysis to conclu de at what level of upper outliers creates excessive costs. establish on Exhibit 4 that concerns the Consumer Packaging and Labeling Act, Noram Foods should have a warning system that signifies that the package has exceeded its required tolerance level of 7. 5 grams. This will reduce unnecessary cost.The operator working at a particular station should be in charge of making sure the weight is within control limits. The company should create incentives to keep control operators motivated while performing these mind numbing tasks. We propose that for every year that a control operator completes their processes while staying in the specified range, they receive personal recognition from the company. This could take the form of an award or plaque offered by the manager. The added incentive can increase employee productivity and moral, thereby reducing turnover.