Assignment Instructions. Analyze Problem 2 “Sailco Production Planning”. Propose a solution. Your solution for this prob
Posted: Tue Apr 26, 2022 12:22 pm
Assignment
Instructions. Analyze Problem 2 “Sailco
Production Planning”. Propose a solution. Your solution for this
problem will be graded based on effort, not on the numerical value
(production quantities) you propose. Submit a report (no more than
one page) to explain clearly how your decision is made. Exploratory
analysis of the historical production and demand data is useful.
Your decision does not have to be based on any mathematical
model.
Problem 2. Sailco Production Planning:
Sailco must determine how many sailboats to produce during each of
the next four quarters. Quarterly sales data and production data of
the past 10 years can be found in Figure 1 below. The data is also
available in Sailco_Data.xlsx. The product has been very
profitable. It is sold at $2000 per sailboat with a production cost
of $1200 per unit. In the first seven years, Sailco’s production
capacity could allow them to produce up to 500 units a quarter. Due
to the steady increase in demand, Sailco has expanded its capacity
to 600 units per quarter since Year 8. Most of the time the
production capacity is not fully utilized. In Quarter 2 of Year 9,
they produced more than 650 sailboats (50 units higher than the
regular capacity) by having employees working overtime. This incurs
an additional cost of $200 per unit for each sailboat beyond the
regular production capacity. Sailco tries it best to satisfy
customers’ demand on time. For simplicity, assume that sailboats
made during a quarter can be used to meet demand for that quarter
(as well as future quarters). In some of the quarters, the
production quantity is less than the demand. This is because they
produced more than demand in earlier quarters and thus have
inventory, which can be used to meet future demand as well.
However, holding inventory is costly. At the end of each quarter
(after production has occurred and the current quarter’s demand has
been satisfied,), a holding cost of $60 per sailboat is
incurred.
How can you help the production manager make the
production plan for the next four quarters?
Instructions. Analyze Problem 2 “Sailco
Production Planning”. Propose a solution. Your solution for this
problem will be graded based on effort, not on the numerical value
(production quantities) you propose. Submit a report (no more than
one page) to explain clearly how your decision is made. Exploratory
analysis of the historical production and demand data is useful.
Your decision does not have to be based on any mathematical
model.
Problem 2. Sailco Production Planning:
Sailco must determine how many sailboats to produce during each of
the next four quarters. Quarterly sales data and production data of
the past 10 years can be found in Figure 1 below. The data is also
available in Sailco_Data.xlsx. The product has been very
profitable. It is sold at $2000 per sailboat with a production cost
of $1200 per unit. In the first seven years, Sailco’s production
capacity could allow them to produce up to 500 units a quarter. Due
to the steady increase in demand, Sailco has expanded its capacity
to 600 units per quarter since Year 8. Most of the time the
production capacity is not fully utilized. In Quarter 2 of Year 9,
they produced more than 650 sailboats (50 units higher than the
regular capacity) by having employees working overtime. This incurs
an additional cost of $200 per unit for each sailboat beyond the
regular production capacity. Sailco tries it best to satisfy
customers’ demand on time. For simplicity, assume that sailboats
made during a quarter can be used to meet demand for that quarter
(as well as future quarters). In some of the quarters, the
production quantity is less than the demand. This is because they
produced more than demand in earlier quarters and thus have
inventory, which can be used to meet future demand as well.
However, holding inventory is costly. At the end of each quarter
(after production has occurred and the current quarter’s demand has
been satisfied,), a holding cost of $60 per sailboat is
incurred.
How can you help the production manager make the
production plan for the next four quarters?