Question: (A) Explain two (2) forecasting tools and discuss why is it important to create accurate forecasting? (3 marks) (B) Explain what is a location strategy

(A) Explain two (2) forecasting tools and discuss why is it important to create accurate forecasting? (3 marks)

(B) Explain what is a location strategy and why it is important in operations management. (2 marks)

(C) The demand for the products has become greater, but the expenses have increased, as such, Auto Parts Limited is contemplating to use another facility to make these products. The facilities costs are outlined below:

Costs

Spanish Town

May Pen

Mandeville

Variable Cost

$500.00

$300.00

$250.00

Fixed Cost

$600,000.00

$750,000.00

$500,000.00

(i) Compute the cost of production for each facility and advise JBL which is the best facility to use to make the products. (9 marks)

(ii) Compute the point at which JBL would be indifferent in selecting a facility. (4.5 marks)

(iii) Explain to JBL what is crossover point and why the company would need to do cross-over point analyses? (1.5 marks) (20 marks)

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