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ECMM112
Manufacturing Supply Chain Management
Ref/ Def Individual Assignment
This assignment is worth 40% of the marks for the whole module. The work consists of three
problems.
Problem 1: [35 Marks]
Ms. Sarah Kim’s company manufactures and sells electric scooters. The monthly unit sales for a
10-month period are provided in Table 1 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
1. Plot the monthly sales data. (4 marks)
2. Compute the sales forecast for November using the following methods:
o A four-month moving average (5 marks)
o A weighted four-month moving average using weights of 0.4, 0.3, 0.2, and 0.1 for
Oct, Sep, Aug, and Jul, respectively (5 marks)
o A linear trend projection (5 marks)
o Exponential Smoothing with α (smoothing constant) of 0.6, assuming an initial
forecast for February of 15,000 scooter units. (5 marks)
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3. Evaluate which forecasting method appears to be the most accurate. Please justify your
answer. (5 marks)
4. Calculate the Mean Absolute Deviation (MAD) for each of the forecasting techniques in
part (b). Which method has the lowest MAD (6 marks)
Problem 2: [25 Marks]
Mr. David’s company produces and sells air purifiers. He wants to understand the relationship
between advertising expenses and monthly sales. The data for the past 10 months is provided in
Table 2 below:
Table 2: Advertising Expenses and Sales Data
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
1. Plot the data points on a scatter plot with Advertising Expenses on the x-axis and Sales on
the y-axis. (5 marks)
2. Calculate the linear regression equation that best fits this data. (10 marks)
3. Using the regression equation, forecast the sales for a month where the advertising
expenses are $11,000. (5 marks)
4. Determine the coefficient of determination (R2) and interpret its meaning in the context of
this problem. (5 marks)
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Problem 3: [40 Marks]
Greentech Industries, a manufacturer of solar panels, needs an aggregate plan for the next six
months. The company has gathered the following information as shown in Table 3 and 4:
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 above 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
No requirement for ending inventory: 0 units
1. Calculate the cost of a strategy where the workforce is varied to meet production
demands each month. Assume the company starts with 15 workers in October. (15
marks)
2. Calculate the cost of a strategy where the workforce remains constant at 15 workers, and
the company uses overtime and inventory to meet demand. (15 marks)
3. What recommendations would you make to Greentech Industries to minimize costs while
meeting demand Justify your suggestions. (10 marks)