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FoldRite Furniture Approaches

ISQA 459/559 DR. MELLIE PULLMAN

Planning Steps
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

Determine the Labor actually needed to fill demand

(March-August) 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 Current Staffing Level

Sufficient Capacity to produce

Annual Forecast with 200 production days in 2010 Workers work 10 hour days Capacity to produce:

Mins/item
Skille d Unskilled CloudChair AlStrong GreenComfort 2 12.8 13 9 28 31

524,280 Cloudchairs 306,916 AlStrong 253,570 Green Comfort

Skilled 2,621.4 1,534.6 1,267.9 9.2 34.5 28.9

Unskilled ? ? ?

Staffing =
labor time * Daily Capacity/ (daily hours/worker *yield) Example: Cloud Chair w/ Skilled (2 min/item)(hr/60min)*(2621.4 ch/day)/ (10 hours/day/worker)*.95 = 9.2 workers

Total Skilled Workers = 73 Total Unskilled Workers=?

Determine Labor Hours Needed (March)


Calculate hours for each Category
Data From Template
Required Labor per product March Forecast Labor hours needed

Staffing = labor time * Daily Demand/ (yield) Example: Cloud Chair w/ Skilled (2min/item)(hr/60min)*(2500 ch/day)/.95 = 87.72 worker hours/day Or (per month @ 18 days) = 87.72 worker hours/day *18 =1578.9 hours

Mins/item
Un Skilled skilled CloudChair AlStrong GreenComfort 2 12.8 13 9 28 31

Daily (18 days)

Monthly

Skilled 2500 1500 1260 1578.9 6063.2 5172.6

Unskilled ? ? ?

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 April May June July August

45,000 27,000 22,680 18 12,815 13,140 325 (2) 32,703 33,480 777 (4)

73,800 29,700 25,200 18 15,006 13,140 (1,866) 10 39,947 33,480 (6,467) 36

65,250 28,500 22,500 15 13,821 10,950 (2,871) 19 36,539 27,900 (8,639) 58

79,200 36,000 27,900 18

86,400 32,400 25,200 18

67,150 29,750 21,250 17

Excess (shortfall) Needed unskilled workers

Tackling the shortages & surpluses


Average all the required people per month for 6

months gives: 13 additional skilled & 40 unskilled Or dont hire until April and Use excess worker capacity to build inventory in March then average the remaining demand over 5 months.

Consider other options (at least 2)


Overtime. What is the additional labor cost? Subcontract. Frees up skilled labor hours and some

unskilled hours, still need to hire some. 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

Change in Design

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