ECMM112 – Manufacturing Supply Chain Management
Ref/Def: Individual Assignment
Weight: 40% of total module marks
Structure: The assignment consists of three problems
Problem 1: Sales Forecasting [35 Marks]
Ms. Sarah Kim’s company manufactures and sells electric scooters. Monthly unit sales for a 10-month period are provided below:
Table 1: Monthly Sales Data
| Month | Sales (units) |
|---|---|
| Jan | 14,000 |
| Feb | 16,500 |
| Mar | 13,200 |
| Apr | 15,700 |
| May | 17,400 |
| Jun | 18,800 |
| Jul | 19,200 |
| Aug | 16,000 |
| Sep | 18,300 |
| Oct | 17,600 |
Tasks:
- Plot the monthly sales data. (4 marks)
- Compute the sales forecast for November using:
- Four-month moving average (5 marks)
- Weighted four-month moving average with weights Oct:0.4, Sep:0.3, Aug:0.2, Jul:0.1 (5 marks)
- Linear trend projection (5 marks)
- Exponential smoothing with α = 0.6, assuming initial forecast for February = 15,000 units (5 marks)
- Evaluate which forecasting method appears most accurate, justifying your answer (5 marks)
- Calculate the Mean Absolute Deviation (MAD) for each method and identify the method with lowest MAD (6 marks)
Problem 2: Regression Analysis [25 Marks]
Mr. David’s company produces and sells air purifiers. He wants to understand the relationship between advertising expenses and monthly sales. Data for the past 10 months is provided below:
Table 2: Advertising Expenses and Sales
| Month | Advertising Expenses ($) | Sales (Units) |
|---|---|---|
| Jan | 5,000 | 1,200 |
| Feb | 7,000 | 1,500 |
| Mar | 6,000 | 1,350 |
| Apr | 8,000 | 1,600 |
| May | 9,000 | 1,700 |
| Jun | 10,000 | 1,800 |
| Jul | 6,500 | 1,400 |
| Aug | 7,500 | 1,550 |
| Sep | 8,500 | 1,650 |
| Oct | 9,500 | 1,750 |
Tasks:
- Plot a scatter plot with advertising expenses on the x-axis and sales on the y-axis (5 marks)
- Calculate the linear regression equation for this data (10 marks)
- Using the regression equation, forecast sales for $11,000 advertising expenses (5 marks)
- Determine the coefficient of determination (R²) and interpret its meaning in this context (5 marks)
Problem 3: Aggregate Planning [40 Marks]
Greentech Industries manufactures solar panels and needs an aggregate plan for the next six months.
Table 3: Costs
| Cost Type | Amount |
|---|---|
| Holding cost | $5/unit/month |
| Subcontracting cost | $30/unit |
| Regular-time labor | $20/hour |
| Overtime labor | $30/hour for hours > 8 hrs/worker/day |
| Hiring cost | $100/worker |
| Lay-off cost | $200/worker |
Table 4: Demand Forecast
| Month | Demand (Units) |
|---|---|
| Nov | 1,000 |
| Dec | 1,200 |
| Jan | 1,400 |
| Feb | 1,600 |
| Mar | 1,800 |
| Apr | 2,000 |
Other Data:
- Current workforce (October): 15 workers
- Labor hours per unit: 2 hours
- Workdays per month: 20
- Beginning inventory: 300 units
- Ending inventory requirement: 0 units
Tasks:
- Calculate the cost of a strategy where the workforce is varied to meet production demands each month, starting with 15 workers (15 marks)
- Calculate the cost of a strategy with a constant workforce of 15 workers, using overtime and inventory to meet demand (15 marks)
- Provide recommendations to Greentech Industries to minimize costs while meeting demand. Justify your suggestions (10 marks)