BreaknmyHip ("BMH") Snowboards has completed its annual sales forecasting process and the sales forecast is included in the tab labeled 20XX Sales Forecast. Link that data to this sheet.

Students must now prepare a manufacturing production model that considers the capabilities of the BreaknmyHip manufacturing facility capabilities.

In this worksheet, students are asked to produce a production schedule using a pure "Chase" production modeling technique. This model should calculate total production costs, using the variables outlined herein, and also project the number of personnel required to complete the production plan. Students will need to create formulas to properly calculate all of the cells in the BLUE HIGHLIGHTED areas.

BreaknmyHip can produce a maximum of 800 snowboards per month, using regular labor time (no overtime), from its own manufacturing facility located in North Bend, OR. Labor costs per hour are an average of $30.25 and the average worker is present for 150 hours per month. Each snowboard takes a cumulative of 3.9 hours of labor cost to produce. BreaknmyHip wants to keep a level workforce in its facility yearlong. Beginning inventory coming into Jan is 588 units and BMH requres at least the same amount inventory at year end.

Sales and Finance have worked together and determined that each unit of backlog (i.e. an out of stock that results in a backorder) costs the company $167 in lost gross profit and impact to brand reputation. BreaknmyHip management historically has strived to keep all manufacturing "in-house" in order to better control quality of output.

However, the growth of the new sales forecast comes with growing customer concerns over back orders. BreaknmyHip must now considering subcontracting its production shortfall to another manufacturer with the goal to eliminate ALL backorders. The subcontractor's labor costs are $49.50 per hour and because of the lack of familiarity with the production process, each snowboard produced by the subcontractor will require 5.90 hours of labor cost to produce.

Students are now asked to prepare the production model using the variables outlined herein and through creating formulas in the BLUE HIGHLIGHTED sections of the spreadsheet.

Be sure to calculate all BLUE HIGHLIGHTED areas and be able to determine TOTAL PRODUCTION COST for each month and the year in total and the number of full time personnel required each month to produce the manufacturing production plan.

Once the data is completed per the above instructions, students should evaluate the model results and make notes for the class workshop discussion regarding areas of concern that the model may point out and ideas around how BreaknmyHip might address such concerns or opportunities.

For example, how are BMH "Artisan" Workers going to react to this model?

A c D D E F G H K L M N 0 0 P Q R BreaknmyHip Snowboards INC. (CBMH) 2022 Manufacturing Production Schedule B BMH Labor Cost/Hr Labor HoursBoard Back Order Cost Workers Hours Month BMH Manufacturing Capa Beginning Inventory Unit: Subcontractor Subcontract Labor Cost/l $ Subcontract Labor Hours 30.25 3.90 167.00 150 800 588 49.50 5.90 Chase Production Model Sales Forecast (t of Snowboards) Jan 1,309 Feb 1,099 Mar 801 Apr 474 May 190 Jun 111 Jul 62 Aug 165 Sep 444 Oct 1,555 Nov 2,334 Dec 2,368 Total #### 800 800 800 800 800 800 800 800 800 800 800 800 #### 1 2 3 4 5 6 7 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 BMH Production Output Subcontractor Production Output Production Surplus (Shortfall) 509 299 1 -326 -610 -689 -738 -635 -356 755 1534 1568 Inventor Balances Beginning Ending Change in Inventory Inventory Backlog (Backorders) BMH Production Cost Per Board Regular Time Back orders cost @ Subcontractor Production Cost Per Board Regular Time @ Total Chase Model Production Costs 34 35 BMH Total Labor Hours BMH Full Time Personnel Required 36 A c D D E F G H K L M N 0 0 P Q R BreaknmyHip Snowboards INC. (CBMH) 2022 Manufacturing Production Schedule B BMH Labor Cost/Hr Labor HoursBoard Back Order Cost Workers Hours Month BMH Manufacturing Capa Beginning Inventory Unit: Subcontractor Subcontract Labor Cost/l $ Subcontract Labor Hours 30.25 3.90 167.00 150 800 588 49.50 5.90 Chase Production Model Sales Forecast (t of Snowboards) Jan 1,309 Feb 1,099 Mar 801 Apr 474 May 190 Jun 111 Jul 62 Aug 165 Sep 444 Oct 1,555 Nov 2,334 Dec 2,368 Total #### 800 800 800 800 800 800 800 800 800 800 800 800 #### 1 2 3 4 5 6 7 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 BMH Production Output Subcontractor Production Output Production Surplus (Shortfall) 509 299 1 -326 -610 -689 -738 -635 -356 755 1534 1568 Inventor Balances Beginning Ending Change in Inventory Inventory Backlog (Backorders) BMH Production Cost Per Board Regular Time Back orders cost @ Subcontractor Production Cost Per Board Regular Time @ Total Chase Model Production Costs 34 35 BMH Total Labor Hours BMH Full Time Personnel Required 36