Sport Obermeyer

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The Sample Problem

Objective: To prepare a production schedule according to demand forecasts made by the design committee.

Constraints: 1. Minimum order quantity at:
Hong Kong – 600
China -1200
2. Total order quantity (1st schedule): 10000
3. Almost Half of production to be done each in China and Hong Kong

Expected Safe Margin of Production: Average Forecast – 2* standard Deviation

|Style |Price |Average |Std Dev |2 * Std Dev |Safe Order | | | | | | |Size | |Gail |110 |1017 |194 |388 |629 | |Isis |99 |1042 |323 |646 |395 | |Entice |80 |1358 |248 |496 |863 | |Assault |90 |2525 |340 |680 |1845 | |Teri |123 |1100 |381 |762 |338 | |Electra |173 |2150 |404 |807 |1343 | |Stephanie |133 |1113 |524 |1048 |65 | |Seduced |73 |4017 |556 |1113 |2904 | |Anita |93 |3296 |1047 |2094 |1202 | |Daphne |148 |2383 |697 |1394 |990 | |Totals |  |20000 |  |  |10572 |

Although we have seen the safe order size but the order size do not confirm with the minimum order size requirements of the plants in Hong Kong and China. We therefore need to drop the orders of those products as they are risky and may result in loss. We can make order allocations as:

1. Allocation 1 : Dropping of ISIS, STEPHANIE, TERI.

Total Remaining order size =...
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