The S&OP team at Kansas Furniture, led by David Angelow, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $125 per unit,inventory carrying costs of $25 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis:Plan B: Vary the workforce to produce the prior month's demand. Demand was 1,300 units in June. The cost of hiring additional workers is $30 per unit produced. The cost of layoffs is $60 per unit cutback. (Enter all responses as whole numbers.)Note: Both hiring and layoff costs are incurred in the month of the change (i.e., going from production of 1,300 in July to 1300 in August requires a layoff (and related costs) of 0 units in August).MonthHireDemand Production (Units)LayoffEnding(Units)InventoryStockouts(Units)1July13002 August11503 September11004 October16005 November19006 December1900

Plan B: Vary the workforce to produce the prior month's demand.JulyDemand: 1300 unitsProduction:…

Answered: The S&OP team at Kansas Furniture, led…

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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degree nozzle sprinklers, 180-degree nozzle sprinklers, and 360-degree nozzle sprinklers. Management has forecast demand for the next four years as follows: Plastic 90 Plastic 180 Plastic 360 Bronze 90 Bronze 180 Bronze 360 1 (IN 000s) 33 15 46 4 5 7 Plastic Demand for plastic sprinklers Percentage of capacity used Machine requirements Labor requirements Bronze YEARLY DEMAND 2 (IN 000s) 45 16 55 9 5 11 Both production lines can produce all the different types of nozzles. The bronze machines needed for the bronze sprinklers require three operators and can produce up to 11,000 sprinklers. The plastic injection molding machine needed for the plastic sprinklers requires three operators and can produce up to 180,000 sprinklers. Three bronze machines and only one injection molding machine are available. Demand for bronze sprinklers Percentage of capacity used Machine requirements Labor requirements What are the capacity requirements for the next four years? (Assume that there is no…
Borges Machine Shop, Inc., has a 1-year contract for the production of 75,000 gear housings for a new off-road vehicle, Owner Luis Borges hopes the contract will be extended and the volume increased next year. Borges has developed costs for three alternatives. They are general-purpose equipment (GPE), flexible manufacturing system (FMS), and expensive, but efficient, dedicated machine (DM). The cost data follow Annual contracted units Annual fixed cost Per unit variable cost General-Purpose Equipment (GPE) 75,000 $100,000 $16.00 Flexible Manufacturing System (FMS) 75,000 $225,000 $14.00 Dedicated Machine (DM) 75,000 $450,000 $13.75 Based on the total cost, the process that is best suited for the current contracted volume is Suppose the contracted volume changes to 275,000 gear housings. Based on the total cost, the process that is best suited for the new volume is Suppose the contracted volume changes to 375,000 gear housings. Based on the total cost, the process that is best suited…
Scenario 8.3- Mousetraps A company faces the aggregate planning problem shown in the table below. Cost of regular production is $15 per unit, the cost of producing the same unit on overtime is $22.50, the cost subcontracting is $27 per unit, and the cost of carrying a unit in inventory from one month to the next is $10. Forecast Beginning Inventory Regular Time Overtime Subcontracting Ending Inventory The labor contract at the plant prohibits both overtime and subcontracting output to exceed 250 units in any five-month window. The plant capacity is 20 units per day produced using two shifts and the plant runs seven days a week. By policy, management wants to avoid stockouts. August Which month has a positive ending inventory for the optimal aggregate plan for Scenario 8.3? September July 800 140 O October August September October November 650 450 550 900 November
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The XYZ company has two plants producing "K Specials". It has the following expected data for the next month's operations. Variable (incremental) costs vary linearly from zero production to maximum capacity production. plant A plant B Max. Capacity, units 1,000 800 Total fixed cost 750,000 480,000 Variable (incremental) Costs Max. Capacity 900,000 800,000 Performance has not been good, so the company expects to receive domestic orders for only 1,200 units next month at a price of 1,400 per unit. How should the production be distributed between the plants for optimum economic operation? A. Plant A should produce 800 units and 400 units for Plant B. B. Plant A should produce 1,000 units and 200 units for Plant B. C. Plant A should produce 700 units and 500 units for Plant B. D. Plant A should produce 900 units and 300 units for Plant B.
Explain the factor which affects the capacity planning frequency.
Crystal Clear Health Drinks: A health drink production company, Crystal Clear Health Drinks, decides to introduce a new line of health drink that will include several flavours. The marketing team forecasts an increase in demand for the new line of product; this is due to the growing popularity of the idea of living healthier lifestyles. They prepare the following aggregate forecasts (tank loads of several flavours) for the next six-month planning horizon: May: 50 June: 60 July: 70 August: 90 September: 80 October: 70 The operations team prepared the following information: 1. The production line has the capacity to produce 60 tank loads per month in regular time at the cost of R10,000 per tank load. 2. Overtime production and subcontracting to the available suppliers cost R16,000 and R18,000 per tank load, respectively. 3. The cost to hold one tank load for one month is R2,000. 4. Demand can also be back-ordered at the cost of R5,000 per month. 5. The company has no starting inventory…
The S&OP team at Kansas Furniture, led by David Angelow, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $125 per unit, Kinventory carrying costs of $25 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis: Plan B: Vary the workforce to produce the prior month's demand. Demand was 1,300 units in June. The cost of hiring additional workers is $30 per unit produced. The cost of layoffs is $65 per unit cut back. (Enter all responses as whole numbers.) Note: Both hiring and layoff costs are incurred in the month of the change (i.e., going from production of 1,300 in July to 1200 in August requires a layoff (and related costs) of 100 units in August). Stockouts (Units) Month 1 July Demand 1200 Hire Production (Units) Layoff Ending (Units) Inventory 2 August 1300 3 September 1200 4 October 1700 5 November 1650 6 December 1650
Developing alternative plans is step four in the planning process .with the use of original examples differentiate between various standing plans Implemented at the new Richmond park pickup point
Q3) Case study below: Checkers plans to open its first “dark store” later this year to support growing demand for its Sixty60 on-demand grocery app. A dark store is a retail outlet that exists exclusively to support on-demand deliveries. It does not have a store front or retail customers, but purely assists with order fulfilment.It will be in Bree Street in Cape Town’s central business district, and comes as the group considers the capacity of its store base to meet the growing demand from SA’s leading grocery app.The Checkers Sixty60 one-hour delivery service was launched in November 2019 and order volumes continue to grow exponentially. It is already available in 300 locations across the country - up from 233 locations last year. About 23 000 products are on offer at in-store prices and it has created almost 6 300 jobs, according to Checkers. The need for such a store format is due to Checkers limiting the number of Sixty60 deliveries it can support from each retail store, which is…
1) Specify Louis Vuitton main activities – while highlighting their nature from an operation management perspective for forecasting scheduling 2) Suggest a capacity enhancement factor (how can Louis Vuitton’s capacity be enhanced?
What are demand forecasting and capacity strategy? Give an example of demand forecasting for a business.

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