ECMM112 – Manufacturing Supply Chain Management Ref/Def: Individual Assignment Weight: 40

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ECMM112 – Manufacturing Supply Chain Management

Ref/Def: Individual Assignment

Weight: 40% of total module marks
Structure: The assignment consists of three problems

Problem 1: Sales Forecasting [35 Marks]

Ms. Sarah Kim’s company manufactures and sells electric scooters. Monthly unit sales for a 10-month period are provided below:

Table 1: Monthly Sales Data

Month Sales (units)
Jan 14,000
Feb 16,500
Mar 13,200
Apr 15,700
May 17,400
Jun 18,800
Jul 19,200
Aug 16,000
Sep 18,300
Oct 17,600

Tasks:

  1. Plot the monthly sales data. (4 marks)
  2. Compute the sales forecast for November using:
    • Four-month moving average (5 marks)
    • Weighted four-month moving average with weights Oct:0.4, Sep:0.3, Aug:0.2, Jul:0.1 (5 marks)
    • Linear trend projection (5 marks)
    • Exponential smoothing with α = 0.6, assuming initial forecast for February = 15,000 units (5 marks)
  3. Evaluate which forecasting method appears most accurate, justifying your answer (5 marks)
  4. Calculate the Mean Absolute Deviation (MAD) for each method and identify the method with lowest MAD (6 marks)

Problem 2: Regression Analysis [25 Marks]

Mr. David’s company produces and sells air purifiers. He wants to understand the relationship between advertising expenses and monthly sales. Data for the past 10 months is provided below:

Table 2: Advertising Expenses and Sales

Month Advertising Expenses ($) Sales (Units)
Jan 5,000 1,200
Feb 7,000 1,500
Mar 6,000 1,350
Apr 8,000 1,600
May 9,000 1,700
Jun 10,000 1,800
Jul 6,500 1,400
Aug 7,500 1,550
Sep 8,500 1,650
Oct 9,500 1,750

Tasks:

  1. Plot a scatter plot with advertising expenses on the x-axis and sales on the y-axis (5 marks)
  2. Calculate the linear regression equation for this data (10 marks)
  3. Using the regression equation, forecast sales for $11,000 advertising expenses (5 marks)
  4. Determine the coefficient of determination (R²) and interpret its meaning in this context (5 marks)

Problem 3: Aggregate Planning [40 Marks]

Greentech Industries manufactures solar panels and needs an aggregate plan for the next six months.

Table 3: Costs

Cost Type Amount
Holding cost $5/unit/month
Subcontracting cost $30/unit
Regular-time labor $20/hour
Overtime labor $30/hour for hours > 8 hrs/worker/day
Hiring cost $100/worker
Lay-off cost $200/worker

Table 4: Demand Forecast

Month Demand (Units)
Nov 1,000
Dec 1,200
Jan 1,400
Feb 1,600
Mar 1,800
Apr 2,000

Other Data:

  • Current workforce (October): 15 workers
  • Labor hours per unit: 2 hours
  • Workdays per month: 20
  • Beginning inventory: 300 units
  • Ending inventory requirement: 0 units

Tasks:

  1. Calculate the cost of a strategy where the workforce is varied to meet production demands each month, starting with 15 workers (15 marks)
  2. Calculate the cost of a strategy with a constant workforce of 15 workers, using overtime and inventory to meet demand (15 marks)
  3. Provide recommendations to Greentech Industries to minimize costs while meeting demand. Justify your suggestions (10 marks)

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