Forecasting & Production Planning

• Please answer all questions and insert relevant spreadsheet templates into a Word document. You should have all materials (both cases and their supporting appendices) in one (1) Word document labeled. Submit your excel work also.
• Format: Both cases should follow the case format: 1) Start with brief problem statement: a summary of the context and your recommendations, 2) Next, provide your data analysis and clearly refer to the appropriate graphics in the Appendices, 3) Articulate insightful patterns, and 4) Propose an appropriate solution based on your analysis. The case should use subheadings rather than Q&A format and the written text should be less than 2 pages followed by the Appendices.

Part 1: Case Toffee Inc.: Demand Planning for Chocolate Bars

1. Determine what kind of sales demand is Toffee Inc. by looking at data (graph data in several ways). Data is provided in spreadsheet in D2L
2. Apply the 2 most appropriate forecasting methods and indicate which is best suited to the situation (show error measurements)
3. Create an inventory policy for the sales and distribution division (Economic order quantity, replenishment trigger (ROP) with the given lead time and service level of 95%)
4. What is the total annual inventory cost (based on number of orders per year and order cycle)?
5. What is the production quantity for Seven Star (assuming zero losses in production) and hence, what is the annual requirement for the cocoa in terms of quantity needed?
6. What is the best quantity bargain for the firm for cocoa? How are the purchase quantity levels decided and what is the total cost outlay for the same?
7. Extra Credit (+5) Calculate the same information for the other primary ingredients.

Part 2: Case Swiss Mile

1. Set up this problem yourself on Solver to make sure that you are getting the similar answers (See exhibit 2 for a potential setup but don’t feel compelled to set it up exactly that way). You may want to use this Solver setup to check your answers in the next parts (increasing costs etc.) to see implications although most of the answers can be found on the sensitivity analysis and other reports.
2. In the optimal solution (maximum possible profit), which of the farms were operating at full capacity and which of the cities’ demands were fully satisfied?
3. If the cost of increasing capacity was the same in all farms, which one should Yann choose and why?
4. If Farm B had to close temporarily for maintenance work, what would the impact be on daily profits?
5. Discount coupons could be introduced at a cost of CHF 15 per day that would increase demand by 100 kg/day in Geneva. But would this solution be profitable?
6. Another option was to introduce a new type of truck to ship units from Farm A to Geneva. These new trucks would reduce the unit variable transportation costs by CHF 0.1. Was it worth investing in this type of truck if the fixed costs increased by CHF 50 per day?