Production variance

Q:  Last quarter, we scheduled overtime on 8 of our lines in Sereno.  We expected production to be around 499 units.  Instead, we got only 432 units.  Is this variance normal or within the limits of the program or are the Sereno workers not as efficient as Merica workers?

A:  Actual production may vary from the amount scheduled.  In Merica plants the variation seldom exceeds five percent.  Reduced output may be due to factors beyond your control such as employee sickness or greater than expected production machine down-time. Conversely, efficiency of your production workers could turn out to be very high in another quarter when everything seems to go right.  Experience has shown that production facilities in Sereno tend to have wider variances, with actual output more likely to be less than scheduled output. Variances may be as high as 15 percent.  Thus your actual production of 13 percent less than scheduled is within the limits of variability.