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
 Sufficient Capacity to produce
Required
Labor
Annual Forecast with 200
production days in 2010
 Workers work 10 hour days
 Capacity to produce:



Mins/item
524,280 Cloudchairs
306,916 AlStrong
253,570 Green Comfort
 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
Daily
Current
Capacity
Current
Staffing Level
=yearly/
200 days
Skille
d
Unskilled
Skilled
Unskilled
CloudChair
2
9
2,621.4
9.2
?
AlStrong
12.8
28
1,534.6
34.5
?
GreenComfort
13
31
1,267.9
28.9
?
Total Skilled Workers = 73
Total Unskilled Workers=?
Determine Labor Hours Needed (March)
Calculate hours for each
Category
 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
Data From Template
Required
Labor per
product
Mins/item
March
Forecast
Labor hours
needed
Daily
(18 days)
Monthly
Un
Skilled skilled
Skilled
Unskilled
CloudChair
2
9
2500
1578.9
?
AlStrong
12.8
28
1500
6063.2
?
GreenComfort
13
31
1260
5172.6
?
Determine Labor Hours Needed
(March-August)
March
April
May
June
July
August
CloudChair
45,000
73,800
65,250
79,200
86,400
67,150
AlStrong
27,000
29,700
28,500
36,000
32,400
29,750
GreenComfort
22,680
25,200
22,500
27,900
25,200
21,250
18
18
15
18
18
17
12,815
15,006
13,821
13,140
13,140
10,950
325
(1,866)
(2,871)
(2)
10
19
32,703
39,947
36,539
33,480
33,480
27,900
777
(6,467)
(8,639)
(4)
36
58
Production days
Required skilled
hours
Available skilled
hours
Excess (shortfall)
Needed Skilled
workers
Required unskilled
hours
Available unskilled
hours
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 don’t 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
 Change in Design



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