Noram Foods

Noram Foods Noram Foods is considering changing their latest insurance policy on package angleiness standardizeds. The current policy states that 95% of packages argon to be greater than the give tongue to net musical arrangement of weights. However, management believes a more accurate defy policy could quail costs for Noram foods fleck insuring net weight does not free fall at a lower place 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 are met.This relatively high percentage is ascribable to increased regulations, undeveloped technology, and negative consumer reception towards under weighted packages. This has motivated Norman to establish reputability by choosing this control policy. excess considerations include * Addressing flexibility of a 95% standard * Updated, precise technology is expensive What is the ROI? Is there on marginal evalua te added? * Keeping norms inwardly government specifications * Preservation of positive company record Lower product deviation without falling under stated weight * Overweight packages creates higher cost and fall downd profit margin * scraggy packages leads to consumer and governmental reaction and inefficiency collectible to under-utilization of capacity Current Policy depth psychology survival 1 Keep Current Control Policy(=95%) With Option 1, Norman Foods will be able to maintain the 95% weight policy and seek cost reduction in another field of operation to increase their profit margin. Potential Cost Reducing Opportunities * Reduce the rotation schedule of control operators i. . rotate either ? day instead of every ? hour * Leads to improvement in efficiency due to less slip of human resources * Increased total output * Mid-shift change could assist control operators dealing with redundancy * Seek possible technological improvements with the weighing instruments * s ubside inefficiency Potential consequential Issues * Probable high turnover 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 need to test and analyze various percentage points below the current 95% standard and, as Graph 1 demonstrates, doing so until an equilibrium is achieved surrounded by 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 compend 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 conti nues to operate. Noram Foods should develop a cost/benefit abstract to conclude at what level of upper outliers creates excessive costs. Based 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 blank space 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 private 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.