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Problem 6 - Based on the data provided in the table below is t.docx

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This document provides demand forecasts and cost data to calculate staffing levels and costs for a manufacturing company under different production planning strategies. It asks the reader to determine the number of employees needed each quarter under a chase demand and level capacity strategy, calculate overtime production costs and total costs for a specified level capacity plan using 14 employees each quarter.

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Problem 6 - Based on the data provided in the table below is this new forecasting technique biased? If so how is it biased? Calculate tracking signal values. Is there any evidence this New Forecast should not be used? Actual New Period Demand Forecast 1 630 810 2
765 700 3 770 700 4 860 705 5 910 740 6
740 810 7 750 820 8 815 1000 9 1250 850 10
1360 1285 11 1430 1450 12
The owner of a small mill-working plant that builds cabinets is developing his aggregate plan for the next year. The relevant cost data and forecast for the next 4 quarters is provided below. The company currently has 12 employees and works one 8 hour shift each day with 2 paid 15 minute breaks. Assume each quarter has 65 working days, and that it currently has no units in stock. Use this information and the information from the table to answer the questions below. Costs Forecast Other Data Holding Cost/Unit/Quarter $25.00 Qtr 1 1500 Labor Hours/Unit 4.5 Hiring Cost $2,500.00 Qtr 2 1200 Beginning Inventory 0 Layoff Cost $3,500.00 Qtr 3 2100 Subcontract Cost $135.00 Qtr 4 1650
Avg. Labor Cost/Hour $18.00 Overtime Labor Cost/Hour $27.00 Part I 1) If the company used a chase demand startegy and rounded any fractional number of employees to the nearest whole number, how many employees would be used in each quarter? 2) If the company used a level capacity strategy and rounded any fractional number of employees to the nearest whole number, how many employees would be used? Period 1 2 3 4
Forecast 1500 1200 2100 1650 Hours Req. Workers Req. Workers Used
Part II Assume the company wants to use a Level Capacity Strategy with 14 employees (Round the Production in each period to the nearest whole number). In any period where on-hand inventory and production do not meet demand the company would supplement with overtime production. Use the table below to calculate the total costs associated with using this plan. Q3) What would the overtime production cost be for this plan? Q4) What would theTotal Cost be for this plan?
Level Capacity Aggregate Plan Period 1 2 3 4 Forecast 1500 1200 2100 1650
Workers Used 14 14 14 14 Hire/(Fire) Production Production - Forecast
Beginning Inventory Ending Inventory Average Inventory Overtime Production Total Cost
Hiring Cost Firing Cost Reg. Output O.T.
Subcontract Inventory Backorder Total Cost:
Total Cost For Plan 1200
850

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Problem 6 - Based on the data provided in the table below is t.docx

  • 1. Problem 6 - Based on the data provided in the table below is this new forecasting technique biased? If so how is it biased? Calculate tracking signal values. Is there any evidence this New Forecast should not be used? Actual New Period Demand Forecast 1 630 810 2
  • 5. The owner of a small mill-working plant that builds cabinets is developing his aggregate plan for the next year. The relevant cost data and forecast for the next 4 quarters is provided below. The company currently has 12 employees and works one 8 hour shift each day with 2 paid 15 minute breaks. Assume each quarter has 65 working days, and that it currently has no units in stock. Use this information and the information from the table to answer the questions below. Costs Forecast Other Data Holding Cost/Unit/Quarter $25.00 Qtr 1 1500 Labor Hours/Unit 4.5 Hiring Cost $2,500.00 Qtr 2 1200 Beginning Inventory 0 Layoff Cost $3,500.00 Qtr 3 2100 Subcontract Cost $135.00 Qtr 4 1650
  • 6. Avg. Labor Cost/Hour $18.00 Overtime Labor Cost/Hour $27.00 Part I 1) If the company used a chase demand startegy and rounded any fractional number of employees to the nearest whole number, how many employees would be used in each quarter? 2) If the company used a level capacity strategy and rounded any fractional number of employees to the nearest whole number, how many employees would be used? Period 1 2 3 4
  • 8. Part II Assume the company wants to use a Level Capacity Strategy with 14 employees (Round the Production in each period to the nearest whole number). In any period where on-hand inventory and production do not meet demand the company would supplement with overtime production. Use the table below to calculate the total costs associated with using this plan. Q3) What would the overtime production cost be for this plan? Q4) What would theTotal Cost be for this plan?
  • 9. Level Capacity Aggregate Plan Period 1 2 3 4 Forecast 1500 1200 2100 1650
  • 11. Beginning Inventory Ending Inventory Average Inventory Overtime Production Total Cost
  • 14. Total Cost For Plan 1200
  • 15. 850