Problem 2 (20 points) Bobble Heads Unlimited makes bobble-head dolls to stock. The company currently uses a chase strategy for their made-to-stock products, with a goal of having a high customer fill rate achieved through a minimum inventory level of not less than 15 days of supply. An average employee can produce an estimated 15 units per day after some process improvements which are currently being implemented and take effect in January. All employees work FULL TIME producing output and do not work overtime or part time. It costs $1,350 to hire a new employee, and $900 when you let an employee go. You incur a holding cost of $2 for each item you have in stock at the end of each month. Historical records for the previous three months are given, and the forecast for the planning horizon. Given this data, answer the following questions: 2.1 Create a pure chase plan that best meets the days of supply goal. 2.2 Create a pure level plan that best meets the days of supply goal. 2.3 Create a mixed plan that best meets the days of supply goal. 2.4 Discuss the implications of all the plans (both quantitative and qualitative) and justify your recommend to management for which of the three plans you created you think is best. 2.5 Create another plan that you think would be better if you could implement changes to the working schedule rules (allow part-time work, overtime, under time)? Show your new plan and explain why you think it is better than the other plans you created. Oct Nov Dec Jan Feb Mar Apr May Jun $ 17,500 $ 14,500 $12,500 $10,400 $13,600 $14,500 $13,500 $12,000 $18,500 8,750 7,250 6,250 5,200 6,800 7,250 6,750 6,000 9,250 4,800 4,050 6,475 (3,950) (3,200) 225 (7,150) (6,925) Sales Forecast (000 $) (units) Actual (units) Diff: Month Cumulative Operations Plan (units) (# workers) Working Days/Mo. Actual (units) Diff: Month Cumulative 11,088 9,072 5,400 42 42 25 18 18 20 17 20 20 22 21 22 5,025 (6,063) 5,200 (3,872) (9,935) 5,425 25 (9,910) Inventory DOS Inv Target Plan (units) (000 $) 12.0 4,838 8,467 $ 13.1 11.6 4,547 3,025 7,957 $ 5,294 $ Actual DOS Inv 6.8 11.2 10.9 (units) 2,725 3,875 2,825 (000 $) $ 4,769 $ 6,781 $ 4,944 Holding cost: Hiring cost: Layoff cost: Oct starting inventory was 2,500 Problem 2 (20 points) Bobble Heads Unlimited makes bobble-head dolls to stock. The company currently uses a chase strategy for their made-to-stock products, with a goal of having a high customer fill rate achieved through a minimum inventory level of not less than 15 days of supply. An average employee can produce an estimated 15 units per day after some process improvements which are currently being implemented and take effect in January. All employees work FULL TIME producing output and do not work overtime or part time. It costs $1,350 to hire a new employee, and $900 when you let an employee go. You incur a holding cost of $2 for each item you have in stock at the end of each month. Historical records for the previous three months are given, and the forecast for the planning horizon. Given this data, answer the following questions: 2.1 Create a pure chase plan that best meets the days of supply goal. 2.2 Create a pure level plan that best meets the days of supply goal. 2.3 Create a mixed plan that best meets the days of supply goal. 2.4 Discuss the implications of all the plans (both quantitative and qualitative) and justify your recommend to management for which of the three plans you created you think is best. 2.5 Create another plan that you think would be better if you could implement changes to the working schedule rules (allow part-time work, overtime, under time)? Show your new plan and explain why you think it is better than the other plans you created. Oct Nov Dec Jan Feb Mar Apr May Jun $ 17,500 $ 14,500 $12,500 $10,400 $13,600 $14,500 $13,500 $12,000 $18,500 8,750 7,250 6,250 5,200 6,800 7,250 6,750 6,000 9,250 4,800 4,050 6,475 (3,950) (3,200) 225 (7,150) (6,925) Sales Forecast (000 $) (units) Actual (units) Diff: Month Cumulative Operations Plan (units) (# workers) Working Days/Mo. Actual (units) Diff: Month Cumulative 11,088 9,072 5,400 42 42 25 18 18 20 17 20 20 22 21 22 5,025 (6,063) 5,200 (3,872) (9,935) 5,425 25 (9,910) Inventory DOS Inv Target Plan (units) (000 $) 12.0 4,838 8,467 $ 13.1 11.6 4,547 3,025 7,957 $ 5,294 $ Actual DOS Inv 6.8 11.2 10.9 (units) 2,725 3,875 2,825 (000 $) $ 4,769 $ 6,781 $ 4,944 Holding cost: Hiring cost: Layoff cost: Oct starting inventory was 2,500