# Case Study: Meridian Water Pumps

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Answers of MERIDIAN WATER PUMPS case Study Marketing Forecast:Month12345Forecasted Demand60075010008507501.Currently eachworker produces an average of 25 pumps in any given month. There are currently 20 workers in the medium-size pump area.So, Currently Total Production of Pumps in a month=25x20=500 PumpsThe production manager said there were currently 50 units in inventory.Additional Production requires:1st Month=600-(500+50) =50 Pumps2nd Month=750-500=250 Pumps3rd Month=1000-500=500 Pumps4th Month=850-500=350 Pumps5th Month=750-500= 250 Pumps So, In 5 Months Time total Additional Pumps needs to produce other than Recent Manpower’s Production Capacity=50 Pumps+250 Pumps+500 Pumps+350 Pumps+250 Pumps=1400 Pumps.Currently eachworker produces an average of 25pumps in any given month. So. Total Mandate Month requires=1400/25=56 Mandate Months of a Manpower
So, In this 5 Months Approximately 60 Mandate Months Need to get incorporated, which means If we divide 60 Mandate Months by 5 Months then Per month 60/5=12 Mandate Month ,which is equal to 12 Manpower HR need to hire initially.It means Total production will be:Each Month: (20+12) *25=800 PumpsInventory will be as follows:1st Month: (800+50) - 600=2502nd Month: (800+250) - 750=3003rd Month: (800+300) - 1000= 1004th Month: (800+100) - 850= 505th Month: (800+50) - 750= 100It takes an average of \$100 to get a person hiredExtra Cost will be due to HR processes=\$100*12=\$1200It costs about \$5 to keep one of these pumps in inventory for a month.Inventory Cost will be as follows:1st Month: (250*5) =\$12502nd Month: (300*5) =\$15003rd Month: (100*5) =\$ 5004th Month: (50*5) =\$2505th Month: (100*5) =\$ 500Extra Cost will be due to inventory: \$1250+\$1500+\$ 500+\$250+\$500=\$4000
2.Chase Production Planning:Companies that use the chase strategy, or demand matching strategy, produce only enough goods to meet or exactly match the demand for goods.The chase strategy has several advantages & disadvantages; it keeps inventories low.As per Chase Production Planning scheduling will be as follows:1st Month: Additional Production requires =600-(500+50) =50 PumpsHere HR will hire (50/25) =2 WorkerCost due to HR Hiring= 2*\$100=\$200Inventory Cost=02nd Month: Additional Production requires =750-(25*22) =200 PumpsHere HR will Hire (200/25) = 8 WorkerCost due to HR Hiring= 8*\$100=\$800Inventory Cost=03rd Month: Additional Production requires =1000-(25*30) =250 PumpsHere HR will Hire (250/25) = 10 WorkerCost due to HR Hiring= 10*\$100=\$1000Inventory Cost=0

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