Overview: Another important consideration when making business recommendations is future outcomes. You must be able to use forecasting tools and the right data to predict elements that affect the future of the business. Using this analysis, along with your analyses and problem statement, you will be able to make recommendations to the organization, such as whether or not to outsource manufacturing.

Prompt: Next, you will be required to make formal recommendations in order to address the organizational challenges, supporting your strategies with applicable and relevant data. You will also need to communicate your recommendations and findings to the appropriate stakeholders. Finally, you will need to consider the organizations future outcomes based on a forecasting analysis. Specifically, you must address the critical elements listed below. I. Recommendations and Future Outcomes:

A. Produce a forecasting analysis using exponential smoothing in order to determine the demand of the product line.

a) Assume Double digit growth 12% evenly distributed quarterly

b) Alpha value: 0.2

c) Beta value: 0.5

I'm not sure what is needed to make this forecast, here are the details from the case study:

RCI, which was founded in 2010 in Santa Monica, California, produced and distributed a wide range of cosmetics offerings through a subscription-based e-commerce model. Customers could choose from different pricing plans, and the products were delivered to their homes monthly. The subscription model provided RCI with a stable income stream while continuing to build brand loyalty, particularly with regards to its three flagship products: Rigel Gold (face cream), Apollo Blue (body cream), and Eris Satin (hand cream). With sales approaching $150 million annually, RCI had experienced double-digit growth over the past few years. Its marketing department estimated that the demand for the three products for the upcoming quarter were 12,000 cartons of face cream, 8,000 cases of body cream, and 18,000 cases of hand cream. The manufacturing process consisted of a two-stage production procedure that used four ingredients: purified water, oil, scents and colours, and emulsifiers. Stage 1 involved materials preparation and initial mixing while stage 2 focused on final blending and packaging. RCIs available first-shift capacity for the next quarter was 15,000 labour-hours for stage 1 and 10,000 for stage 2. The first-shift hourly rate was $8.50 for stage 1 and $9.25 for stage 2. A second shift was available with a 10 per cent reduction in capacity and a 10 per cent increase in wage rates. The cost for raw materials was $1 per pound for purified water, $1.50 per pound for oil, $3 per pound for scents and colours, and $2 per pound for emulsifiers. The production department had available 200,000 pounds of purified water, 50,000 pounds of oil, 7,500 pounds of scents and colours, and 15,000 pounds of emulsifiers (see Exhibit 1). RCI could also subcontract with a local supplier previously identified by Anderson for face cream and body cream at a cost of $40 per carton and $55 per carton, respectively. This vendor had the capacity to meet the demand requirements that were in excess of RCIs capabilities. Based on the boards direction, Anderson decided not to use the vendor for the production of hand cream. The CEO recognized that other vendor arrangements could include producing critical sub-components of the products (e.g., water-oil solutions). Anderson planned to explore this possibility as a future production option.

Additional Detials/Calculations:

Labor Cost SHIFT DETAILS Resource Face Cream, Shift 1 Item Required Labor Stage 1 1.50 Labor Stage 2 0.80 Water 8.00 Oils 1.00 Scents/Colors 0.50 Emulsifiers 0.50 Total $/Unit 8.50 9.25 1.00 1.50 3.00 2.00 Cost ($) 12.75 7.40 8.00 1.50 1.50 1.00 32.15 Face Cream, Shift 2 Item Labor Stage 1 Labor Stage 2 Water Oils Scents/Colors Emulsifiers Total Resource Required 1.50 0.80 8.00 1.00 0.50 0.50 $/Unit 9.35 10.18 1.00 1.50 3.00 2.00 Cost ($) 14.03 8.14 8.00 1.50 1.50 1.00 34.17 Production Schedule D E F B Production Schedule - Based on Sensitivity Analysis Cost ($) Resource Required 1.80 1.00 6.00 3.00 Optimal Production Plan Face Cream Body Cream Body Cream, Shift 1 Item Labor Stage 1 Labor Stage 2 Water Oils Scents/Colors Emulsifiers Total 0 $/Unit 8.50 9.25 1.00 1.50 3.00 2.00 Cost ($) 15.30 9.25 6.00 4.50 0.90 1.40 37.35 Resource Required 1.80 1.00 6.00 3.00 0.30 0.70 Body Cream, Shift 2 Item Labor Stage 1 Labor Stage 2 Water Oils Scents/Colors Emulsifiers Total $/Unit 9.35 10.18 1.00 1.50 3.00 2.00 16.83 10.18 6.00 4.50 0.90 1.40 39.81 Method/Product Shift 1 Shift 2 Vendor Total 13,200 4,800 Hand Cream 1,000 0 7,000 N/A 8,000 0 12,000 12,000 0.30 0.70 18,000 Total cost: $1,368, 112.00 Cream Shift 1 Item Labor Stage 1 Labor Stage 2 Water Oils Scents/Colors Emulsifiers Total Resource Required 1.00 0.50 7.00 2.00 0.40 0.60 $/Unit 8.50 9.25 1.00 1.50 3.00 2.00 Cost ($) 8.50 4.63 7.00 3.00 1.20 1.20 25.53 Hand Cream, Shift 2 Item Labor Stage 1 Labor Stage 2 Water Oils Scents/Colors Emulsifiers Total Resource Required 1.00 0.50 7.00 2.00 0.40 0.60 $/Unit 9.35 10.18 1.00 1.50 3.00 2.00 Cost ($) 9.35 5.09 7.00 3.00 1.20 1.20 26.84 Summary Table Linear Programming Model Formulation (8 production variable, 11 constraints, minimization problem) Face Cream, Face Cream, Face Cream, Body Cream, Body Cream, Body Cream Hand Cream, Hand Cream, Shift 1 Shift 2 Subcontracted Shift 1 Shift 2 Subcontracted Shift 2 Shift 1 1.50 0.80 1.80 1.00 1.00 0.50 Labor 11 Labor 21 Labor 12 Labor 22 Water wale Oils os Scents/Colors 8.00 1.00 0.50 0.50 1.50 0.80 8.00 1.00 0.50 0.50 6.00 3.00 0.30 0.70 1.80 1.00 6.00 3.00 0.30 0.70 7.00 2.00 0.40 0.600 15000 7600 1.00 4800 0.50 2400 7.00 132000 32000 2.00 39000 www 0.401 7500 0.60 11500 12000 8000 180001 26.84 1368112 4800.00 Capacity Unit Cost 150001 8.50 10000 9.25 13500 9.35 9000 wy 10.18 200000 1.5 50000 2000 7500 15000 12000 8000 18000 Emulsifiers 1 Amount (FC) Amount (BC) Amount (HC) Cost # of cartons 32.15 0.00 34.17 0.00 40.00 12000.00 37.35 1000.00 39.81 0.00 55.00 7000.00 25.53 13200.00 Labor Cost SHIFT DETAILS Resource Face Cream, Shift 1 Item Required Labor Stage 1 1.50 Labor Stage 2 0.80 Water 8.00 Oils 1.00 Scents/Colors 0.50 Emulsifiers 0.50 Total $/Unit 8.50 9.25 1.00 1.50 3.00 2.00 Cost ($) 12.75 7.40 8.00 1.50 1.50 1.00 32.15 Face Cream, Shift 2 Item Labor Stage 1 Labor Stage 2 Water Oils Scents/Colors Emulsifiers Total Resource Required 1.50 0.80 8.00 1.00 0.50 0.50 $/Unit 9.35 10.18 1.00 1.50 3.00 2.00 Cost ($) 14.03 8.14 8.00 1.50 1.50 1.00 34.17 Production Schedule D E F B Production Schedule - Based on Sensitivity Analysis Cost ($) Resource Required 1.80 1.00 6.00 3.00 Optimal Production Plan Face Cream Body Cream Body Cream, Shift 1 Item Labor Stage 1 Labor Stage 2 Water Oils Scents/Colors Emulsifiers Total 0 $/Unit 8.50 9.25 1.00 1.50 3.00 2.00 Cost ($) 15.30 9.25 6.00 4.50 0.90 1.40 37.35 Resource Required 1.80 1.00 6.00 3.00 0.30 0.70 Body Cream, Shift 2 Item Labor Stage 1 Labor Stage 2 Water Oils Scents/Colors Emulsifiers Total $/Unit 9.35 10.18 1.00 1.50 3.00 2.00 16.83 10.18 6.00 4.50 0.90 1.40 39.81 Method/Product Shift 1 Shift 2 Vendor Total 13,200 4,800 Hand Cream 1,000 0 7,000 N/A 8,000 0 12,000 12,000 0.30 0.70 18,000 Total cost: $1,368, 112.00 Cream Shift 1 Item Labor Stage 1 Labor Stage 2 Water Oils Scents/Colors Emulsifiers Total Resource Required 1.00 0.50 7.00 2.00 0.40 0.60 $/Unit 8.50 9.25 1.00 1.50 3.00 2.00 Cost ($) 8.50 4.63 7.00 3.00 1.20 1.20 25.53 Hand Cream, Shift 2 Item Labor Stage 1 Labor Stage 2 Water Oils Scents/Colors Emulsifiers Total Resource Required 1.00 0.50 7.00 2.00 0.40 0.60 $/Unit 9.35 10.18 1.00 1.50 3.00 2.00 Cost ($) 9.35 5.09 7.00 3.00 1.20 1.20 26.84 Summary Table Linear Programming Model Formulation (8 production variable, 11 constraints, minimization problem) Face Cream, Face Cream, Face Cream, Body Cream, Body Cream, Body Cream Hand Cream, Hand Cream, Shift 1 Shift 2 Subcontracted Shift 1 Shift 2 Subcontracted Shift 2 Shift 1 1.50 0.80 1.80 1.00 1.00 0.50 Labor 11 Labor 21 Labor 12 Labor 22 Water wale Oils os Scents/Colors 8.00 1.00 0.50 0.50 1.50 0.80 8.00 1.00 0.50 0.50 6.00 3.00 0.30 0.70 1.80 1.00 6.00 3.00 0.30 0.70 7.00 2.00 0.40 0.600 15000 7600 1.00 4800 0.50 2400 7.00 132000 32000 2.00 39000 www 0.401 7500 0.60 11500 12000 8000 180001 26.84 1368112 4800.00 Capacity Unit Cost 150001 8.50 10000 9.25 13500 9.35 9000 wy 10.18 200000 1.5 50000 2000 7500 15000 12000 8000 18000 Emulsifiers 1 Amount (FC) Amount (BC) Amount (HC) Cost # of cartons 32.15 0.00 34.17 0.00 40.00 12000.00 37.35 1000.00 39.81 0.00 55.00 7000.00 25.53 13200.00