Assignmnet: Forecasting, Capacity Planning, Inventory and Supply change Management

Aim:

This project aims to assess the learner’s understanding and knowledge of Forecasting
Capacity Planning, Inventory control and supply chain Management.

Brief:

Following on from the Process Design work that you recently completed to develop a new
product, this final assignment is to develop a forecast, capacity plan, inventory management
system and supply chain management agreements for the product for the next 12 months.

Document details:

Use the following headings

(a) Product Description (2 marks)
Give a brief description of the product and Image.

(b) Forecasting (25 marks)
Create a forecast that will show the projected demand for the product over the next 12
months. Consider and plan for the following situations that will impact your forecast:

▪ The initial launch of the new product.

▪ General month on month growth/increase in product demand.

▪ A large order received at some point in the 12 month period.

▪ Seasonal demand (depending on the product) – a ramp up for Christmas, or some
marketing plan or environmental change that might generate a significant demand.

▪ Any other situations that might generate an increase or decrease in demand for
the product and forecast must be presented in a month by month table and must be supported
with rationale and notes to explain the forecasted increases or decreases in demand.

(c) Capacity Planning (23 marks)

Detail the Capacity Expansion Strategies that will be used to support the monthly change
in forecast across the 12 months. The strategies must include details related to expansion
of the following areas:

• Staff,

• Equipment,

• Facilities,

• Supplies,

• Training.

• Shifts/Overtime/part time/annualised hours

• Outsourcing/subcontracting.

(d) Inventory Management (25 Marks)
1. Outline the inventory control system you selected to track your SKUs. Justify why you
have chosen this system (10 Marks)
2. Define what method will you use to control your Inventory ( raw materials, WIP,
Finished goods etc)? (15 Marks)

Discuss the following:
• why you selected this method of inventory control
• how this system will be implemented
• details of the potential limitations of the selected method.

(e) Supply Chain Management (25 Marks)
1. Identify your key supplier and logistics partners (5 Marks)
2. Select one of your key suppliers and create a contract agreement with the following
headings populated (20 Marks):

• Specification of decision rights

• Pricing

• Minimum purchase commitments

• Buyback or returns policies

• Allocation rules

• Lead time

• Quality

• Quantity flexibility (QF)

• Procedure to deal with any issues with the supplier, e.g. Quality issues, late
deliveries, incorrect orders received etc.

• Termination of contract.

Document format:
• Font: Heading 1 – Arial, size 14, Bold
• Heading 2 – Arial, size 12, Bold
• Normal – Arial, size 11.
• Line spacing 1.5.

Document length:
• 6 to 8 pages (2 pages max for each topic ie. Forecast, 2 pages max for Capacity
Plan etc.).

• The cover page, TOC or reference list is not included in the word count.
Markin Rubric