The Kintampo Tourist Resort (KTR) is one of Ghana’s best holiday centers and sells a special type of souvenir called Expensive. As you might expect, the demand for Expensive is highly seasonal as tourist centers exhibit a highly seasonal attraction pattern, with peaks during the summer months. The following forecasts are available for Expensive. Inventory carrying cost = GH¢3 per piece per quarter Production per employee = 1000 piece per quarter Regular workforce = 50 workers Cost of regular production = GH¢50 per piece Hiring cost per employee = GH¢75 Firing cost per employee = GH¢100 The management of KTR does not wish to use Level production nor Chase Demand but wants to adopt one of the following strategies: Strategy I: Produce 71,000 pieces in Quarter 1, Produce 151,000 pieces in Quarter 2, Produce 200,000 pieces in Quarter 3, and Produce 30,000 pieces in Quarter 4. Strategy II: Produce 51,000 pieces in Quarter 1, Produce 161,000 pieces in Quarter 2, Produce 210,000 pieces in Quarter 3, and Produce 30,000 pieces in Quarter 4. Strategy III: Produce 61,000 pieces in Quarter 1, Produce 141,000 pieces in Quarter 2, Produce 198,000 pieces in Quarter 3, and Produce 52,000 pieces in Quarter 4. (i) Which of the three strategies will you recommend to KTR? (ii) What is the cost savings between your choice and the worst strategy?
1. The Kintampo Tourist Resort (KTR) is one of Ghana’s best holiday centers and sells a special type of souvenir called Expensive. As you might expect, the demand for Expensive is highly seasonal as tourist centers exhibit a highly seasonal attraction pattern, with peaks during the summer months. The following
Inventory carrying cost = GH¢3 per piece per quarter Production per employee = 1000 piece per quarter Regular workforce = 50 workers
Cost of regular production = GH¢50 per piece Hiring cost per employee = GH¢75
Firing cost per employee = GH¢100
The management of KTR does not wish to use Level production nor Chase Demand but wants to adopt one of the following strategies:
Strategy I: Produce 71,000 pieces in Quarter 1, Produce 151,000
pieces in Quarter 2, Produce 200,000 pieces in Quarter 3,
and Produce 30,000 pieces in Quarter 4.
Strategy II: Produce 51,000 pieces in Quarter 1, Produce 161,000
pieces in Quarter 2, Produce 210,000 pieces in Quarter 3, and Produce 30,000 pieces in Quarter 4.
Strategy III: Produce 61,000 pieces in Quarter 1, Produce 141,000 pieces in Quarter 2, Produce 198,000 pieces in Quarter 3,
and Produce 52,000 pieces in Quarter 4.
(i) Which of the three strategies will you recommend to KTR?
(ii) What is the cost savings between your choice and the worst strategy?
2.
Explain how customer complaints can be a source of new product idea.
3. Using a phone’s battery to illustrate, explain how the mean time between failures (MTBF) can be used as a measure of a product’s reliability.
4. Your firm is keen on ensuring that customer requirements are adequately captured as measurable design specifications. Recommend an appropriate quality improvement tool that can enable your firm to achieve this objective.
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