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Production Planning at Parbold Products

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Added on  2019-09-25

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Parbold Products make a range of 3 kitchen appliances and wish to use quantitative modelling techniques to produce a production plan and resolve any production planning issues. The report consists of five sections: Executive Summary, Forecasting Model Description, Linear Programming Model Description, Results, Assumptions, Limitations and Future Work.
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Production Planning at Parbold Products Problem Overview Parbold Products make a range of 3 kitchen appliances: a food processor, a toastie machine and a slow cooker. Sales have been good and the board of directors are looking at how to plan for the coming financial quarter. They wish to use quantitative modelling techniques to produce a production plan and resolve any production planning issues. Data for past sales can be found in the associated Excel file. Products are rarely out of stock and so demand is assumed to be equivalent to sales. At the end of this quarter the company is expected to have about £500,000 to spend on production during the next quarter. The Head of Production has stated that this will be used to cover the total production cost (i.e. a production budget) of the items produced for 2017 Q1. The Head of Sales has stated that the company should borrow some money to increase this production budget as he believes it will not be sufficient to produce enough supply to meet demand. The production cost of each item is as follows: It is standard practice to produce a plan to try and meet the expected demand. Should demand exceed this supply then extra production is implemented using overtime. This overtime is outside the scope of this analysis. The company have a policy of planning to meet at least 75% of expected demand in order maintain brand reputation. It is not clear to the Head of Analytics whether this should be interpreted as 75% of expected demand for each product or 75% of overall demand. The Chairman of the Board is interested in maximising sales revenue. This is to be the objective of this study. The sales price of each product is as follows:
Production Planning at Parbold Products_1

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