Create A Semiannual Production Plan For A New Business ✓ Solved

Create a semiannual production plan for a new business produ

Create a semiannual production plan for a new business product or service using notional demand and inventory data. Base the plan on market estimates of intended sales and production. The plan should replicate techniques in the course text and may be presented as a basic table. Include the following: estimates of labor hours consumed; estimated number of workers required, considering a standard work week, current inventory levels, monthly receipts of new inventory, and varying monthly demand. For service businesses without inventory, use inventory of support or consumable materials. Specifically address: 1) a semiannual production plan using notional demand and inventory; 2) estimated labor hours consumed; 3) estimated worker requirements accounting for standard work week, current inventory, monthly receipts, and monthly demand variations.

Paper For Above Instructions

Overview

This paper presents a semiannual production plan for a notional product—an assembled Smart LED Desk Lamp—using forecasted monthly demand, beginning inventory, and scheduled receipts of inventory. It computes monthly production requirements to maintain a safety stock, translates production into labor hours, and estimates worker requirements under a standard work week. The approach follows standard production planning and MRP-style netting techniques (Stevenson, 2020; Nahmias, 2013).

Assumptions and Parameters

• Product: Smart LED Desk Lamp (finished goods).
• Planning horizon: 6 months (semiannual), Months 1–6.
• Beginning finished-goods inventory: 100 units; safety stock: 50 units.
• Notional monthly demand forecast (units): M1=200, M2=250, M3=300, M4=220, M5=180, M6=260.
• Scheduled receipts of finished goods (units) arriving during month: M1=50, M2=0, M3=100, M4=0, M5=80, M6=0.
• Labor requirement per finished unit: 2.0 direct labor hours (assembly, test, pack).
• Standard work week: 40 hours; assume 4 weeks per month => 160 productive hours per worker per month (for planning simplicity) (BLS, 2023).
• Production rule: end-of-month inventory must be at or above safety stock. Monthly production = max(0, demand + safety stock - (beginning inventory + receipts)).

Semiannual Production Plan (Notional Table)

Calculations and Rationale

Production for each month is computed so that ending inventory equals the safety stock (50 units) after meeting forecast demand and accounting for scheduled receipts. For example, Month 1 required production = demand + safety − (beginning inventory + receipts) = 200 + 50 − (100 + 50) = 100 units. These netting techniques are standard in master production scheduling and materials planning (Chopra & Meindl, 2019; Nahmias, 2013).

Labor hours are the product of planned production and the per-unit labor standard. Total planned labor hours over six months = 1,130 units × 2.0 hrs/unit = 2,260 hours. Worker requirements per month = labor hours / 160 hours per worker per month. Fractional values indicate the equivalent full-time employees; practical staffing requires rounding and consideration of overtime, temporary labor, or cross-training to smooth peaks and troughs (Stevenson, 2020; Heizer & Render, 2020).

Operational Recommendations

• Staffing: round monthly workers to whole persons while using part-time/contract labor or overtime during peak months (M2 and M6). For example, plan staffing levels: M1=2, M2=4, M3=3, M4=3, M5=2, M6=4. Cross-training reduces the need to hire temporary workers (Slack et al., 2019).
• Inventory strategy: maintain the 50-unit safety stock to buffer demand variability; consider reducing safety stock by improving forecast accuracy or lead-time reduction (Chopra & Meindl, 2019).
• Supplier coordination: align scheduled receipts of subassemblies to smooth production; increases in receipts reduce required production for a month and vice versa (APICS/ASCM guidance).
• Sensitivity analysis: model ±10–15% demand scenarios to estimate additional labor needs and determine breakeven overtime or subcontracting costs (Hopp & Spearman, 2011).

Limitations

This plan is based on notional data and simplified assumptions (e.g., fixed 2.0 labor hours per unit and 160 hours/month per worker). Real-world planning should account for variability in yield, scrap, absenteeism, learning curves, and seasonality. More sophisticated planning could use finite-capacity scheduling, multi-level BOMs, and time-phased MRP (Jacobs & Chase, 2018).

Conclusion

The semiannual production plan above meets forecasted demand while preserving safety stock and explicitly accounts for scheduled receipts. Translating production into labor hours and worker equivalents provides a practical staffing plan for operations, with recommendations for smoothing labor through cross-training and supplier timing. The methodology follows standard operations and supply chain planning principles (Stevenson, 2020; Nahmias, 2013).

References

• Chopra, S., & Meindl, P. (2019). Supply Chain Management: Strategy, Planning, and Operation (7th ed.). Pearson.
• Heizer, J., & Render, B. (2020). Operations Management (13th ed.). Pearson.
• Hopp, W. J., & Spearman, M. L. (2011). Factory Physics (3rd ed.). Waveland Press.
• Jacobs, F. R., & Chase, R. B. (2018). Operations and Supply Chain Management (15th ed.). McGraw-Hill Education.
• Nahmias, S. (2013). Production and Operations Analysis (7th ed.). Waveland Press.
• Stevenson, W. J. (2020). Operations Management (13th ed.). McGraw-Hill Education.
• Slack, N., Chambers, S., & Johnston, R. (2019). Operations Management (8th ed.). Pearson.
• APICS / Association for Supply Chain Management (ASCM). (2021). APICS Dictionary and production planning resources. ASCM Publications.
• Bureau of Labor Statistics (BLS). (2023). Usual Weekly Hours of Work. U.S. Department of Labor. https://www.bls.gov
• Chase, R. B., Jacobs, F. R., & Aquilano, N. J. (2018). Operations Management for Competitive Advantage (13th ed.). McGraw-Hill Education.