Consider going to a 4 day or other form of shorten workweek. Restrict the use of overtime. Consider the use of a planned shutdown during the summer vacation season or force the use of accrued vacation time to reduce the number of workers available. 3. TRAPPER LAWN EQUIPMENT COMPANY REVISITED a) The average forecast error is calculated as the difference between the total forecast and actual demand divided by the total forecast. In this case, since the 3 month cumulative error is given in the table: Forecast error % = -1425 / (5000 + 4000 + 6500) x 100 = -9.2% Reducing each of the forecast values by 9.2% for January to June yields the projected values units sales and resulting inventory levels and days of supply shown in the table below. b) Options for consideration Change the forecast. This would require the marketing and production mangers coming to agreement on what the new forecast should be. Adjust the production plan to compensate for the fact that the forecast seems to have a relatively consistent negative bias. This option has little risk in the near term since inventory levels are relatively high. 4. SKI & SEA, INC. a. Level Plan Aggregating the forecast Quarter 1 2 3 4 Total Jet Skis 10,000 15,000 16,000 3,000 44,000 Snowmobiles 9,000 7,000 19,000 10,000 45,000 Total 19,000 22,000 35,000 13,000 89,000 Determining the production rate: (Total forecast - beginning inventory) / 4 quarters (89,000 - 1,000) / 4 = 22,000 per quarter
Consider going to a 4 day or other form of shorten workweek. Restrict the use of overtime. Consider the use of a planned shutdown during the summer vacation season or force the use of accrued vacation time to reduce the number of workers available. 3. TRAPPER LAWN EQUIPMENT COMPANY REVISITED a) The average forecast error is calculated as the difference between the total forecast and actual demand divided by the total forecast. In this case, since the 3 month cumulative error is given in the table: Forecast error % = -1425 / (5000 + 4000 + 6500) x 100 = -9.2% Reducing each of the forecast values by 9.2% for January to June yields the projected values units sales and resulting inventory levels and days of supply shown in the table below. b) Options for consideration Change the forecast. This would require the marketing and production mangers coming to agreement on what the new forecast should be. Adjust the production plan to compensate for the fact that the forecast seems to have a relatively consistent negative bias. This option has little risk in the near term since inventory levels are relatively high. 4. SKI & SEA, INC. a. Level Plan Aggregating the forecast Quarter 1 2 3 4 Total Jet Skis 10,000 15,000 16,000 3,000 44,000 Snowmobiles 9,000 7,000 19,000 10,000 45,000 Total 19,000 22,000 35,000 13,000 89,000 Determining the production rate: (Total forecast - beginning inventory) / 4 quarters (89,000 - 1,000) / 4 = 22,000 per quarter
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