Read and answer the following questions.

1- Describe Web 3.0 and the next generation of online business.

2-Problem 13.2. Explain how to solve the problem and then respond.

. 13.1 Prepare a graph of the monthly forecasts and average forecast demand for Chicago Paint Corp., a manufacturer of specialized paint for artists. MONTH PRODUCTION DAYS DEMAND FORECAST January 22 1,000 February 18 1, 100 March 22 1,200 April 21 1,300 May 22 1,350 June 21 1,350 July 21 1,300 August 22 1,200 September 21 1, 100 October 22 1, 100 November 20 1,050 December 20 9000 0 13.2 Develop another plan for the Mexican roong manufacturer described in Examples 1 lg to 49 and Solved Problem 13.1 E. a. For this plan, plan 5, the rm wants to maintain a constant workforce of six, using subcontracting to meet remaining demand. Is this plan preferable? b. The same roong manufacturer in Examples 1 E1 to 419 and Solved Problem 13.1 II; has yet a sixth plan. A constant workforce of seven is selected, with the remainder of demand lled by subcontracting. c. Is this better than plans 15? [5' APPROACH Plot daily and average demand to illustrate the nature of the aggregate planning problem. SOLUTION First, compute demand per day by dividing the expected monthly demand by the number of production days [working days) each month and drawing a graph of those forecast demands (Figure 13.39). SecondJr draw a dotted line across the chart that represents the production rate required to meet average demand over the 6month period. The chart is computed as follows: Total expected demand _ 6,200 Number of production days _ 124 Average requirement 2 2 5D units per day Figure 13.3 lGraph of Forecast and Average Forecast Demand Forecast demand 1 Level production. using average monthly forecast demand 50 Production rate per working day 0 Jan. Feb. Mar. Agr. May June = Month 1 r r r r 22 1B 21 21 22 20 = Number of working days 541 wormng uays INSIGHT Changes in the production rate become obvious when the data are graphed. Note that in the first 3 months, expected demand is lower than average, while expected demand in April, May, and June is above average. LEARNING EXERCISE If demand for June increases to 1,200 (from 1,100), what is the impact on Figure 13.3 9? [Answer: The daily rate for June will go up to 60, and average production will increase to 50.8 [6,300/124).] RELATED PROBLEM 13.1\";I The graph in Figure 13.3El illustrates how the forecast differs from the average demand. Some strategies for meeting the forecast were listed earlier. The rm, for example, might staff in order to yield a production rate that meets average demand l[as indicated by the dashed line). Or it might produce a steady rate of, say, 30 units and then subcontract excess demand to other roong suppliers. Other plans might combine overtime work with subcontracting to absorb demand or vary the workforce by hiring and laying off. Examples 2 E to fill3 illustrate three possible strategies. \fANALYSIS OF PLAN 1 APPROACH Here we assume that 50 units are produced per day and that we have a constant workforce, no overtime or idle time, no safety stock, and no subcontractors. The film accumulates inventory during the slack period of demand, January through March, and depletes it during the higherdemand warm season, April through June. We assume beginning inventory = 0 and planned ending inventory = 0. SOLUTION We construct the table below and accumulate the costs: PRODUCTION PRODUCTION DEMAND MONTHLY ENDING DAYS AT 50 UNITS FORECAST INVENTORY INVENTORY PER DAY CHANGE 542 Total units of inventory carried over from one month to the next month Workforce required to produce 50 units per dayr 1,850 units 10 workers Because each unit requires 1.6 laborhours to produce, each worker can make 5 units in an 8hour day. Therefore, to produce 50 units, 10 workers are needed. Finally, the costs of plan 1 are computed as follows: CALCULATIONS (2 1, 850 units carried )4 $5 per unit] Inventory carrying $ 9,250 Regulartime labor 99,200 [2 10workers X $Sperday X 124 days) Other costs (overtime. hiring, U layoffs, su boo ntraoting) Total cost $108,450 INSIGHT Note the signicant cost of carrying the inventory. LEARNING EXERCISE If demand for June decreases to 1,000 (from 1,100), what is the change in cost? [Answen Total inventory carried wiJl increase to 1,950 at $5, for an inventory cost of $9,?50 and total cost of $108,950.] RELATED PROBLEMS 1321913129, 13.19E'l Student Tip We saw another way to graph this data in Figure 13.30. The graph for Example 20 was shown in Figure 13.3 0. Some planners prefer a cumulative graph to display visually how the forecast deviates from the average requirements. Such a graph is provided in Figure 13.40. Note that both the level production line and the forecast line produce the same total production. Figure 13.4 Cumulative Graph for Plan 1 7,000 6,200 units 6,000 Reduction of inventory 5,000 4,000 Cumulative level of production, using average monthly Cumulative demand units forecast requirements 3.000 2.000 Cumulative forecast requirements 1,000 Excess inventory Jan. Feb. Mar. Apr. May June MonthExample 2 Plan 1 for the Roong SupplierA Constant Workforce One possible strategy (call it plan 1) for the manufacturer described in Example 1 E1 is to maintain a constant workforce throughout the 6month period. A second [plan 2) is to maintain a constant workforce at a level necessary to meet the lowest demand month {March} and to meet all demand above this level by subcontracting. Both plan 1 and plan 2 have level production and are, therefore, called level strategies. Plan 3 is to hire and lay off workers as needed to produce exact monthly requirementsa chase strategy. Table 13.3LE' provides cost information necessary for analyzing these three alternatives. Table 13.3 Cost Information Inventory carrying cost $ 5 per unit per month Subcontracting cost per unit '36 20 per unit Average pay rate 33 10 per hour [$80 per day] Overtime pay rate $1? per hour {above 8 hours per day} Laborhours to produce a unit 1.6 hours per unit Cost of increasing daily production rate (hiring and $300 per unit training} Cost of decreasing daily production rate (layoffs) $600 per unit INSIGHT Note the lower cost of regular labor but the added subcontracting cost. LEARNING EXERCISE If demand for june increases to 1,200 (from 1,100), what is the change in cost? [Answen Subcontracting requirements increase to 1,588 at $20 per unit, for a subcontracting cost of $31,?60 and a total cost of $10?,152.] RELATED PROBLEMS 132913129, 135195I Example 3 Plan 2 for the Roong SupplierUse Of Subcontractors within a Constant Workforce ANALYSIS OF PLAN 2 APPROACH Although a constant workforce is also maintained in plan 2, it is set low enough to meet demand only in March, the lowest demandperday month. To produce 38 units per day (800,\" 21) inhouse, 7.6 workers are needed. {You can think of this as 7' fulltirne workers and 1 parttimer.) All other demand is met by subcontracting. Subcontracting is thus required in every other month. No inventory holding costs are incurred in plan 2. SOLUTION Because 6,200 units are required during the aggregate plan period, we must compute how many can be made by the firm and how many must be subcontracted: [rthouse production 38 units per dag,r x 124 production days 4,?12 units Subcontract units : 6, 200 4, T12 : 1, 488 units The costs of plan 2 are computed as follows: CALCU LATIONS Regulartime labor 3 135392 (2 THE workers X $80 per day x 124 days) Subcontracting 29,7 :3- (= 114381111113 X $2Dperunit} Total cost $105,152 Thus, the total cost, including production, hiring, and layoff, for plan 3 is $117,800. INSIGHT Note the substantial cost associated with changing l{both increasing and decreasing) the production levels. LEARNING EXERCISE 544 If demand for June increases to 1,200 {from 1,100), what is the change in cost? [Answen Daily production for June is 60 units, which is a decrease of 8 units in the daily production rate tron'l May's 68 units, so the new june layoff cost is $4, 800 (2 8 X $500) , but an additional production cost for 100 units is $1,600 (100 X 1.6 X $10] with a total plan 3 cost of $116,400.] RELATED PROBLEMS 132913129, 13.19'EI The nal step in the graphical method is to compare the costs of each proposed plan and to select the approach with the least total cost. A summary analysis is provided in Table 13.5 Q. We see that because plan 2 has the lowest cost, it is the best of the three options. Table 13.5 Comparison of the Three Plans COST PLAN 1 {CONSTANT PLAN 2 [WORKFORCE OF 7.6 PLAN 3 {HIRING WORKFORCE DF 10 WORKERS PLUS AND LAYOFFS TO WORKERS) SUBCONTRACTORS] MEET DEMAND) Inventory 35 9,250 0 S 0 carrying Regular labor 99,200 T5392 99,200 Overtime labor 0 0 0 Hiring 0 0 9,000 Layoffs 0 0 9,600 Subcontracting 0 29,760 0 Total cost $108,450 $105,152 $117,800 Of course, many other feasible strategies can be considered in a problem like this, including combinations that use some overtime. Although graphing is a popular management tool, its help is in evaluating strategies, not generating them. To generate strategies, a systematic approach that considers all costs and produces an effective solution is needed.