Question

DKM is a company producing high quality t-shirts in a factory located in Dubai. The factory currently has 7 machines, and each machine can produce up 12,500 bags per year. Each machine requires 4 workers for its operation (i.e. 28 employees). In order to plan capacity for the coming three years, the forecasting team has provided the following demand forecast values: 60,000 units in year 1, 80,000 units in year 2, and 100,000 units in year 3. The supply chain manager is planning to hire new employees in the third year. How many new employees should he hire? 6 2

Answer 1

Correct option is: 4

The supply chain manager should hire 4 new employees in the third year on the basis of demand forecast.

Year 1	Demand Forecast
1	60,000 units
2	80,000 units
3	100,000 units

With available machines & workers, 87500 (7X12500=87,500) units can be produced, so, on the basis of demand forecast in first & second year, the demand for t-shirts can be fulfilled with available resources. But in the third year, forecasted demand is exceeding the number of units that can be produced with available machines & workers by 12,500 (100,000-87,500=12,500). So, 4 new workers should be hired in order to meet the forecasted demand.