McDonald’s Corporation Case synopsis Operations Management Case Study

MCDONALD’S CASE
Question 1
The level capacity strategy is the best option for McDonald's over the other two capacity and demands reconciliation approaches. The level strategy is set to allow the business to maintain the workforce level and output rates over the planning. In this view, McDonald’s is bound to maintain an inventory level of the completed products higher than expected in situations of low demand variabilities. When the demand increases above the steady production rate, the business can continue maintaining a constant production and a stable workforce. In all this period, the surplus inventory of the completed products accumulated over the low demand can absorb the increased demand (Salvatore, Roberto, Borja & Jose, 2018). The approach is well applicable in the business, especially because peak hours are when the customers flock to the restaurant. This is when the demand is high, but the employees are steady, and the production rate is maintained. When the business experiences the low peak hours, the workforce is still steady, and production rates are maintained. The products surplus produced during the low peak hours can meet the demand during the high peak hours when the customers are more than expected capacity.
When using this strategy, McDonald’s is bound to set the production level in the forecasting period and break down the results regularly. The strategy is set to be sustainable at McDonald’s owing to the existence of adequate machines, equipment, and materials. In this strategy, the focus is always on the product output. The rate is set to increase or decline following strategic decisions influenced by the inventory management system. The approach requires McDonald's management to always monitor and control, although this issue comes with instability aspect as the increase or decrease is made more frequent. The level demand approach allows the business to plan for the available resources and acquire more resources in the human production hours available. When the business cannot cope with the increase in demand to make the production efficiency, it can outsource other units from other McDonald’s outlets. However, it is critical to note that the negative results of the level strategy include costs associated with excess inventory, outsourcing costs, and backorder costs. These are the costs of expediting the orders and the loss of customer goodwill.
Question 2
The operations management at McDonald’s adopts the best approach of the four Ds model. The business model of the company is complex and desires an experienced and tactical implementation. The aspect of directing is evident in the operations management at McDonald’s restaurants. The diverse products, the quality service, and the franchising at the business indicate how the operations are well-coordinated and established to assure customer satisfaction and quality. The directing part of the strategy model shows how the business is determined to facilitate all business activities and operations (Adebanjo, Pei-Lee, Ahmed, Atay & Ractham, 2020). The design is the other element in the model. The business design is well nurtured to ensure McDonald’s offers the customers quality products and service...