Jones Industrial Heating and Cooling Company

BMGT 2258

Mohamed Hersi

4/2/17

CASE ONE ANALYSIS.

Maggie Jones owns Jones Industrial Heating and Cooling Company that sells and installs Carrier HVAC units for large industrial facilities. Each unit sells for $30,500 including installation. Maggie has several concerns including she is considering moving from her New Albany locations to a new warehouse facility. Maggie has hired me as a consultant to provide operations management advice and I’ll start with Forecasting Analysis. Businesses like to use different forecasting models for different scenarios, in this case however a Carrier Rep said to switch to a 3-period average or Exponential Smoothing with a .09 alpha. If you calculate the 2017 inventory levels with exponential smoothing with an alpha of 0.09, you get 505. If you calculate the 2017 inventory using the 3-period average, you get 473. The forecasting model that gives you the lowest number always win. So, in this case the 3-point average is the best method to use in her case. If you choose the method that gives you the highest number, you risk having excess inventory thus causing you to lose money. So, the 3-point average is the way to go!

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Hiring Full-Time or Part-Time workers is a tough question for businesses like Maggie’s and what the right mix should be, if there even is one. When I did the calculations on excel it was very direct which one you should choose. For part-time workers, the total employee productivity rate per labor dollar for 2016 is $20,200. For full-time workers, the total employee productivity rate per labor dollar for 2016 is $92,330. There are many reasons why productivity rate for part-time workers is lower for instance the obvious one is hours worked but for your specific case in the excel data you gave me there are months where you have no part-time workers. Those months include, March, April, May, July, August, September and November. One of the reasons you might have few part-time workers is obviously stability and they’re considered temporary. With that analysis and data, I would tell you to hire fewer part-time workers because they’re productivity rate is lower. Stick to hiring more full-time workers.