The Stewart company produces two flavors of salad dressings: Paul\'s and Newman\

Question

The Stewart company produces two flavors of salad dressings: Paul's and Newman's. Each is available in bottles and single-serving plastic bags. The marketing department, which is now running a promotional campaign for Newman's dressing, provided the following forecasted demand values (in thousands) for the next five years. It is given in the below table. Currently, three machines that can package up to 150,000 bottles each per year are available. Each machine requires two operators and can produce bottles of both Newman's and Paul's dressings. Six bottle machine operators are available. Also, five machines that can package up to 250,000 plastic bags each per year are available. Three operators are required for each machine, which can produce plastic bags of both Newman's and Paul's dressings. Currently, there are 20 plastic bag machine operators are available. Calculate the equipment and labor requirements for each year to meet the product line forecasts.

Explanation / Answer

Solution:

Step 1: We use forecasting techniques to predict sales fro individual products within each product line. The marketing department, which is now running a promotional campaign for Newman's dressing, provided the following forecast demand values for the next five years . The campaign is expected to continue for the next two years.

Bottles(000s)

Step 2: Now we will calculate equipment and labor requiremnets to meet the product line forecasts. Currently, three machines that can package up to 150,000 bottles each per year available.

Now we will calculate the equipment and labor requirement for 1 year

Equipment:

              Capacity Used: 450/135 = 0.3 or 0.3 x 3 = 0.9 machine

              Capacity Used: 300/1250 = 0.24 or 0.24 x 5 = 1.2 machine

Labor:

0.9 bottle machines x 2 operators = 1.8 operators

1.2 bag machines    x 3 operators = 3.6 operators

Step 3: Project labor and equipment availabilities over the planning horizon. We repeat the preceding calculations for the remaining years:

YEAR 1 2 3 4 5 Paul's

Bottles(000s)

60 100 150 200 250 Plastic bags (000s) 100 200 300 400 500 Newman's Bottles(000s) 75 85 95 97 98 Plastic bags(000s) 200 400 600 650 680

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