FoldRite Furniture Approaches

ISQA 459/559 DR. MELLIE PULLMAN

Planning Steps y Calculate the existing available skilled and unskilled workers   Case states that company has sufficient workers to make the annual forecast over 200 production days (2010)-level So calculate average need for each product at each skill level y Determine the Labor actually needed to fill demand (March-August) y Determine the total cost of fulfilling demand for each option by figuring cost of:      Overtime Use of subcontractors Hiring and Training workers Cost of Design Change Cost of Carrying Inventory .

Calculate Available Workers Based on Forecast 2010 data Data From Template Required Labor Daily Current Capacity =yearly/ 200 days Mins/item Skille d Unskilled Current Staffing Level y Sufficient Capacity to produce Annual Forecast with 200 production days in 2010 y Workers work 10 hour days y Capacity to produce:    524.621.6 34.4 ch/day)/ (10 hours/day/worker)*.8 28 1.9 28.534.2 ? AlStrong 12.2 workers 2 9 2.280 Cloudchairs 306.9 ? Total Skilled Workers = 73 Total Unskilled Workers=? .267.570 Green Comfort CloudChair Skilled Unskilled y Staffing = labor time * Daily Capacity/ (daily hours/worker *yield) Example: Cloud Chair w/ Skilled (2 min/item)(hr/60min)*(2621.4 9.95 = 9.5 ? GreenComfort 13 31 1.916 AlStrong 253.

9 ? AlStrong 12.95 = 87.72 worker hours/day *18 =1578.2 ? GreenComfort 13 31 1260 5172.8 28 1500 6063.Determine Labor Hours Needed (March) Calculate hours for each Category y Staffing = labor time * Daily Demand/ (yield) Example: Cloud Chair w/ Skilled (2min/item)(hr/60min)*(2500 ch/day)/.9 hours Data From Template Required Labor per product March Forecast Labor hours needed Daily (18 days) Mins/item Un skilled Monthly Skilled Skilled Unskilled CloudChair 2 9 2500 1578.72 worker hours/day Or (per month @ 18 days) = 87.6 ? .

821 10.480 777 (4) 73.800 29.200 18 15.500 15 13.140 (1.871) 19 36.703 33.006 13.539 27.680 18 12.250 28.947 33.700 25.000 27.400 25.866) 10 39.639) 58 79.900 18 86.750 21.140 325 (2) 32.000 22.815 13.150 29.467) 36 65.250 17 .Determine Labor Hours Needed (March-August) March CloudChair AlStrong GreenComfort Production days Required skilled hours Available skilled hours Excess (shortfall) Needed Skilled workers Required unskilled hours Available unskilled hours Excess (shortfall) Needed unskilled workers April May June July August 45.200 18 67.480 (6.400 32.200 36.950 (2.000 27.900 (8.500 22.

.Tackling the shortages & surpluses y Average all the required people per month for 6 months gives: y 13 additional skilled & 40 unskilled y Or don¶t hire until April and Use excess worker capacity to build inventory in March then average the remaining demand over 5 months.

still need to hire some. What is the additional labor cost? y Subcontract. Frees up skilled labor hours and some unskilled hours.Consider other options (at least 2) y Overtime. y Hiring    Early hiring in March with carrying extra inventory Hiring in April with carrying extra inventory Hiring and Training in March Hire all workers March 1 and use overtime for some Hire all needed workers in April Hire unskilled workers to train in March and start extra production in April y Change in Design    .

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