1. FoldRite Furniture Approaches
ISQA 459/559
Dr. Mellie Pullman

2. 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

3. Calculate Available Workers
Based on Forecast 2010 data
Data From Template
Sufficient Capacity to produce Annual Forecast with 200 production days in 2010
Workers work 10 hour days
Capacity to produce:
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)*( ch/day)/ (10 hours/day/worker)*.95
= 9.2 workers
Required
Labor
Daily Current
Capacity
Current
Staffing Level
Mins/item
=yearly/ 200 days
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=?

4. Determine Labor Hours Needed (March)
Calculate hours for each
Category
Data From Template
Staffing =
labor time * Daily Demand/ (yield)
Example: Cloud Chair w/ Skilled
(2min/item)(hr/60min)*(2500 ch/day)/.95
= worker hours/day
Or (per 18 days)
= worker hours/day *18
= hours
Required
Labor per product
March Forecast
Labor hours needed
Mins/item
Daily
(18 days)
Monthly
Skilled Un
skilled
Unskilled
CloudChair 2 9
2500
1578.9 ?
AlStrong
12.8 28
1500
6063.2
GreenComfort 13 31
1260
5172.6

5. 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
21,250
Production days 18 15 17
Required skilled hours
12,815
15,006
13,821
Available skilled hours
13,140
10,950
Excess (shortfall)
325
(1,866)
(2,871)
Needed Skilled workers
(2) 10 19
Required unskilled hours
32,703
39,947
36,539
Available unskilled hours
33,480
777
(6,467)
(8,639)
Needed unskilled workers
(4) 36 58

6. 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.

7. 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