Ice Cream Project – Midterm
Segments
This project is related to the making of ice cream. To answer the questions I have provided
several videos including Ben and Jerry and several others. For our purposes use the Ben and
Jerry line to create the flow chart. Added info could be gained from other sources to fill in
the specific metrics.
The costs and other values stated in this project are not what are used by Ben and Jerry.
They are assumptions to be used in the calculating the various segments of this assignment.
Process Flow
1. Describe the product or service being creating
2. Provide some historical background for the product or service
3. Identify an individual or team of individuals to be responsible for developing the
flowchart and, ideally, for subsequent analyses.
4. Specify boundaries of the transformation process
5. Identify and sequence the operational steps or the activities necessary to complete the
output for the customer.
6. Identify the performance metrics for the operational steps or the activities within the
selected transformation process
7. Draw the flowchart, using a swimlane format, define and use symbols in a consistent
manner. (Use Visio)
8. Use the video(s) provided and any other video or sources which describe the process
a. You can use data from similar products or competitors.
b. Cite your sources in the narrative.
Supply Chain
1. Identify Suppliers at least three tiers back.
2. Identify Customers; include distributors, stores and end users
a. Include both domestic and international distributor
3. Identify types of transportation between tiers; should be appropriate for the product.
4. Draw a flow chart using the swimlane format, using Visio
Process Selection
1. State which process flow is most representative of this product/service?
a. Use the terms and definitions found in the chapter to explain why you made this choice.
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b. Be sure to discuss the process design characteristics discussed in class that define the
process flow type.
2. State which Order Fulfillment is most representative of this product or service?
a. Use the terms and definitions found in the chapter to explain why you made this choice.
b. Identify the order penetration point on the process flow chart (Visio).
Forecasting
1. Using the past actual demand in Table 1, determine which of the following forecasting
techniques would provide the best forecast.
a. Naïve, Moving Average, Weighted moving average (0.6,0.3,0.1) and the exponential
smoothing (alpha = 0.65).
b. Calculate the MAD and select the best forecast technique
c. Using the Tracking Signal, monitor the past 12 months of actual demand and forecast to
see if it is consistent within the +/- 3.75 range.
d. Show all work in an excel spreadsheet
i. Make sure your work is organized
ii. Title the spreadsheet as an appendix
2. Using the selected forecast technique forecast the next 6 months (Jan thru Jun) of demand.
a. Assume that the monthly demand for pints is anticipated to increase by an average of
5%, beginning in January.
b. If the Moving average, Weighted moving average and exponential smoothing are
determined to be the best the use the most recent forecasted values.
i. Some forecasted months will use last year data only and some will use a
combined last year and the new adjusted year demand.
c. If the Naïve approach is found to be the best then use the actuals from the months of
the previous year adjusted for the 5% increase.
3. Write in a paragraph format describing your results.
a. Why you chose the forecast technique, reference the appendix.
b. The next 6 months of forecasted demand (put in a table and add to word doc)
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Table 1:
Forecasting information
Demand
Company wide
Annual Sales
(000)
$
240,000.00
Pints made
annually(000)
48,000.00
Days worked
per year
333
Pints made
Monthly (000)
4,000.00
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
% Capacity
produced /
Month
70%
80%
85%
95%
110%
125%
130%
140%
120%
90%
80%
75%
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Aggregate/Capacity Planning
1. Using the forecasted demand, determine the preferred strategy for satisfying the demand
2. Use the following assumptions
a. Your production rate is 120 pints per minute
b. Run 1 batch per shift
c. Typically run 3 shifts on a 6 day a week schedule
i. Each shift is only 7 hours of productive time (not 8 hours)
d. Overtime if necessary is 1 shift on Sunday.
i. If you perform overtime then it must produce ice cream for the entire shift.
e. You are told that the maximum units produced using over time is 10% of maximum
regular production.
f. Inventory can be used but only up to 50% of the regular capacity in pints.
g. Inventory at the beginning of Jan is 500,000 pints
h. The cost of raw materials is $0.85 per pint
i. You pay $15.50 per hour per worker for regular time
j. Overtime is time and a half
k. Subcontracting is not allowed
l. Backorder is $1/month/pint
m. Hiring is $250 per worker
n. Layoff is $500 per worker
o. Inventory is $0.25 per month/pint
p. Labor force in Jan is 150 workers
q. Worker works 160 hours per month
3. Identify the Master Production Schedule for the 6 months previously forecasted (Jan thru June)
a. Find a solution for the following
i. Using a leveling strategy- 3 shift operation with Overtime if necessary
ii. Use a leveling strategy, - 3 shifts using Backorder only
b. Use the spreadsheet provided on the website (Ice Cream Cap Planning form)
c. Label it as an appendix
4. In your S&OP report cite the MPS, the total cost to product for the year and the strategy used.
a. Do you have a feasible solution?
b. Cite which of the two options you choose and why.
c. Do you need any modifications to the inventory or Overtime restrictions?
d. State the Master Production Schedule.
e. State the Total Cost.
f. State the remaining Inventory at the end of the time period, if any.
g. State any remaining Backorders, if any.
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