Assignment
Due in Week 8
The objective of this assignment is to create a full production plan, including forecasting, for the company Bikesco. The specific questions you are to answer can be found at the end of the assignment.
The following list shows the annual sales (in units) of the total bicycles sold by Bikesco.
Month
1 2 3 4 5 6 7 8 9 10 11 12
2006 190 240 255 267 285 324 385 360 342 302 270 231
2007 214 232 265 279 304 358 391 344 356 313 268 245
2008 243 276 254 285 321 387 423 402 374 347 281 257
Bikesco makes various products on an assemble to order manufacturing line. The following is a BOM that Bikesco uses to create the bicycles. Note the usages for each of the components. If there is not a usage indicated, then the part is considered a“common component” and is used in all the bicycles.
It is now January 1st 2009.
Question 1
15 Marks
a) Using the Na?ve, Moving Average, Exponential Smoothing, Exponential Smoothing with Trend and Seasonal Index methods, forecast the sales for January 2009.
a = 0.3
F t-1 = 250
b = 0.5
Tt – 1= 6
Total Sales for 2009 are expected to be 10% higher than the total sales of 2008.
Hint: Always round the forecast up!
10 Marks
b) What forecast do you think is the best forecast for Bikesco to use? Fully Explain your answer.
10 Marks
c) Using the usages identified in the BOM and a seasonal index forecasting method, create a forecast for each component for each month in 2009.
(Hint:Pay attention to the number of products required and usages for each product)
Question 2
20 Marks
a) Although Bikesco is an ATO firm, it requires a certain number of finished goods to be held in inventory. Create a one year level, chase and lot sizing MPS for the bicycles indicated by your group number. (See below for the type of bicycle) Use the forecasts in question 1 c. Do not include “orders” or “ATP” in the MPS.
Bikesco requires 10 units of Safety Stock at all times.
The beginning inventory is 10 finished units.
A bicycle can be assembled in 1 day, therefore, there is no lead time.
Lot Size = 20
Group Product
10 Drum Brake, 500 V, Speedster
5 Marks
b) If set-up costs are `$300 and inventory costs are $10 / month, what are the costs of each production strategy?
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