Create a semiannual production plan for your new business idea, product, or service using notional demand and inventory data. This initial production plan is based on your market estimates of what you intend to sell and produce. My new business service idea is for Netflix to create a premium membership plan by investing in smarter algorithms to curate their specific content. This refined streaming service would be known as Netflix Elite.
The instructor indicated that:
For the first grading element, use a basic table/spreadsheet to make 6 months worth of production demand and inventory receipts and issues, ex. January-June monthly production and inventory (NOT 1 QUANTITY FOR THE 6 MONTHS BUT 6 INDIVIDUAL MONTHS). Be sure to include sufficient narrative to explain your numbers and your rationale for those numbers. You need some rough-order-of-magnitude (ROM) estimate of where your business demand might start off with. The assignment calls for 6 months worth of data so, in any 6-month period, there would very likely be some variation in production so, what’s your rationale for the variation in production? In the narrative, more important than the numbers is your rationale for how you would go about making this estimate in the real-world.
NOTE: YOU DO NOT HAVE TO HAVE INVENTORY HOURS IN YOUR PRODUCTION TABLE IF YOU’RE TALKING ABOUT A SERVICE BUSINESS, YOUR CALL.
The second grading element calls for the Labor Hours; ex. if you are making bicycles and each takes 20 hours, and you have to produce 1000, then you’ll need 20,000 labor hours to cover production for one month. There would reasonably be month-to-month variation in this number too.
The 3rd grading element is the number of workers required. So based on the example, how many employees, both full and part-time, to generate those 20,000 labor hours? This is a very basic calculation.
Note – if your business idea is a service, YOU STILL HAVE PRODUCTION HOURS AND RESOURCE REQUIREMENTS to satisfy customer demand, just like in manufacturing so please don’t think that this doesn’t apply to you.
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