A company is introducing crochet and hand knit kitchen towels in the Canadian market on 1^stof April 2022. Companies like William Sonoma, and Bed, Bath and Beyond dominate this market. However, these companies mostly sell cloth kitchen towels, and target an older demographic. With the growing demand for crochet and hand knit towels, the company estimates that they can sell 1.8 million of these towels in 2022. The promotional price is set at $8 per towel. The inventory carrying cost is 20% of the yearly average inventory value. The industry growth is expected to be 7% year over year. Your group have been hired as consultants to answer the following questions:

1. What forecasting techniques should the company use for a) sales in 2023 and b) sales in the next five years? Please justify your recommendations. Please provide forecast figures from year 2 to year 5.

2. The company is building a facility to produce 3 million kitchen towels per year, in Asia. Is this capacity just right, too little or too much? What factors will you consider in building capacities? Should they adopt a a) leading strategy b) lag strategy or c) straddle strategy to build further capacities. Please justify.

3. The company also wants you to recommend an aggregate planning strategy. They have provided you with the following information.

Month	Expected Demand	Production Days
April 2022	150000	21
May 2022	170000	22
June 2022	160000	21
July 2022	150000	22
August 2022	140000	22

Workers pay per hour - $10.00

Number of labour hour required to produce 1 towel – 15 minutes

Number of hours in a shift – 8 hours

The company operates two shifts

The inventory carrying cost is 20% of the unit price.

The cost of increasing daily production rate (hiring and training) is $ 0.5 per unit

The cost of decreasing daily production rate (layoffs) is $1 per unit

Cost of subcontracting = $ 4 per unit

Based on these data, what aggregate planning strategy should the company pursue.

4) The company’s suppliers are in Asia. What strategy should the company adopt for raw material inventory management as well as finished goods inventory management. Please recommend a distribution grid (storage locations across the nation) that will ensure timely placement of products to meet customer/retailer orders.