Lamson Corporation Case Writeup

Lamson Corporation (R)

Team Members:

1. Lukmman Alarfat
2. Ahmed Alobaidan

1. What  is  your  production  plan  for  the  18  and  36  inch  tiles  for  the  twelve  periods  (only  choose  from  the  nine  available  production  options  in  Exhibit  1)?  Explain in  a  few  paragraphs  why  you  think  this  plan  is  right  for  the  current  season.

The decision to choose suitable production plan as per period of the year was very much based on the sales pattern. As we understood from the case study that summer season is the high sales period and almost three-quarter sales are made in summer only. Moreover, the months of June and July are the highest demand periods as per previous data and sales trend. The months of October till March are low volume months and cumulatively they make one-fourth sales of entire year. From April the sales pattern in on increasing trend and reached peak during the last weeks of June and first week of July conjuncture, however, post July it again starts dipping and eventually decrease to a low volume value in beginning of October.

Interestingly, if we only consider the sales pattern, we may opt for different options, however when we bring in the other factors in account, it helps to take optimized decision and more importantly profitable. Consequently, the production plan was chosen in order to keep in mind the following factors:

• Sales trend
• Time of the year
• Cost of inventory holding
• Cost of stocking-out, and
• Cost of overtime paid

1. Estimate your total end-of-season-end costs using Exhibit 2.  Note:  To  do  this  you  will  have  to  develop  a  forecast  of  demand  for  18”  and  36”  tiles

Notably there aren’t much detailed data available regarding the last few years to prepare a historical analysis. However, based on past few years, a sales trend has been provided. We also know that maximum demand for 18” tiles last year during peak season was 4,500 units and for 36” inch tiles, it was 2,000 units.