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53690787_Case-converted.xlsx - Case: FoldRite Furniture...

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Case: -FoldRite Furniture Co.:Planning to Meet a Surge in DemandCase Characters:-Jose Ramos- VP of FoldeRite Furniture CMartin Kelsey- Production managerAlice Yung- CFOCase facts about FoldEstablished in 1987Throughout 1990s company grew organically.1999-2006 annual growth rate 3.5%. (More than markgrew by 6% annually.In 2006 company’s performance was very bad due toLoss of productivity and yields caused by high labor tCost of raw materials was increasingIncreasing proportion of unskilled labor.Continuous acquisition of small firms which distractedissues.This thing also generated liquidity shortageThese things resulted in reduced margins as well as inweeks.Then company decided to change management in 2007, wcompany did very well during recession.What changes they made during recession:-
Major policies that company adopted after chNew CEO marshal Epstein from a major consumer goodManufacturing VP Jose Ramose was hired.Together they decided 4 major goals:-Continued innovation in both products and processes,Customer responsiveness: producing high quality produproviding quick service,Lean manufacturing, andRetention of a well-trained, stable, and productive workReduced no of products to provide high quality productsConsequences:-All these helped in reduction of lead time.They had a $60M revenues and profitable despite recesFoldeRite’s Market:-Revenue wise there market was:Hospitality:-60%
Governments, corporate offices, schools, colleges , clinics accountedIndividual Customers:-9%Demand for FoldRite products was seasonal. Folding chairs were in high dchairs and folding tables were also popular around thDue to recession demand was very low in 20They reduced no of products in 2010 and their main produAlStrong, a folding table in which recycled aluminum reGreenComfort, a washable and stackable chairCloudChair, a folding chair that conformed to a wide vacomfortable seating even for overweight people (a growinNow next focus of FoldeRite furniture:-Customization of their productsProviding high quality productsEmphasizing on ecofriendly products Manufacturing proThe products used similar materials, which reduced theprocurementoverhead, and increasedquality.
All production planning was highly centralized. The prodto various tasks based on daily production plans derived fFinancial issues:-According to their CFO Yung credit situation is tight.They have to generate cash from costly resources as exHuman resources issues:-Hiring a skilled worker would cost $1500\Supervisor cost for these workers$25 per hour + 33% fTraining of unskilled worker takes 4 weeks during whichSolutionThe aggregate planning is carried out using the chase strategy, level strategy, subthe stable workforce strategy. The calculations are shown belowWages (Skilled) = 19 + 33% of 19 = 25.27Wages (Unskilled) = 9 + 10% of 9=9.9Chase strategyCalculation for CloudChairProduction requirement = Demand forecastProduction hours required (Unskilled) = Production Requirement * Time taken torequired (Skilled) = Production Requirement * Time taken to produce one unit (2per month * Working hours in a day (10)Works required (Skilled) = Production hours required (Skilled) / Hours per montWorks required (Unskilled) = Production hours required (Unskilled) / Hours perHiring Cost (Unskilled) = New workers hired (Unskilled) * Hiring expense (66.5) StraighChase strategy - CloudChair

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Term
Spring
Professor
Minton
Tags
Laborer, Production Hours

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