Chapter 4: Q13OQ (d). (page 478)
Demand | |
April | 60 |
May | 55 |
June | 75 |
July | 60 |
August | 80 |
September | 75 |
(d) Calculate a forecast for October using your regression formula
The forecast for October is 81.01.
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Develop a production plan and calculate the annual cost for a firm whose demand forecast is fall, 10,000; winter, 8,000; spring, 7,000; summer, 12,000. Inventory at the beginning of fall is 500 units. At the beginning of fall, you currently have 30 workers, but you plan to hire temporary workers at the beginning of summer and lay them off at the end of summer. In addition, you have negotiated with the union an option to use the regular workforce on overtime during winter or spring if overtime is necessary to prevent stock-outs at the end of those quarters. Overtime is not available during the fall. Relevant costs are hiring, \(100 for each temp; layoff, \)200 for each worker laid off; inventory holding, \(5 per unit-quarter; backorder, \)10 per unit; straight time, \(5 per hour; over time, \)8 per hour. Assume that the productivity is 0.5 units per worker hour, with eight hours per day and 60 days per season.
If the tracking signal for your forecast was consistently positive, you could then say this about your forecasting technique?
This is the total amount required for a particular item
This type of analysis is most appropriate when the past is a good predictor of the future?
None of the techniques for determining order quantity consider this important non-economic factor that could make the order quantity infeasible.
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