Integrated Case of Hope Steel, Inc.
A Brief Profile of Hope STEEL works, inc.
Hope Steel Works, Inc. – also known to the local market as ‘HopeSteel’ - is one of the largest producers of concrete-reinforcementsteel bars. It was established in December of 1964 by Mr. JohnLong, an industry pioneer whose work in the steel industry began in1948, the company has built up a solid reputation for superiorquality, good service, and fair prices.
Hope Steel supplies to a wide range of construction projects.Its bars are found in low-cost housing, private residences, luxurycondominiums, commercial and industrial projects, high-risebuildings, schools, hospitals, bridges, highway over-passes andviaducts, dams and power stations, tunnels, airports, seaports,aqueducts, telecommunication sites, and other publicinfrastructure.
Certified under ISO-9001:2000, Hope Steel regularly sample, testand analyze its products to ensure that only superior qualityreaches its customers.
Rebar Sizes  Â
The standard Rebar sizes that the Company manufactures and sellsare as follows: 10mm, 12mm, 16mm, 20mm, 25mm, 28mm, 32mm, and 36mm.For special orders, it can also make 40mm and 50mm bars.
Case 1 Introduction
Over the past years, the demand for 25mm rebars have fluctuatedwith a seasonal pattern being observed.   Since rebarsare manufactured on a “made to order†basis, the VP for Productionwanted an accurate forecast for the second half of this year 2015,to enable them to plan and schedule the ordering and the storage ofthe raw materials needed for the production. Demand for the 25 mmrebars for last year (2014) were as follows:
Demand for the year 2014
x | y |
January | 3000 |
February | 3500 |
March | 4800 |
April | 4300 |
May | 2400 |
June | 2700 |
July | 3500 |
August | 3500 |
September | 1700 |
October | 2100 |
November | 3200 |
December | 2700 |
| |
Based on the data above, using simple linear regression withseasonality, compute the forecasts for the months of July, August,September, October, November and December of 2015.
Case 2 Introduction
In the production of rebars, carbon steel is melted down througha furnace, is molded and elongated into very hot rods, and are thenpushed through the rolling mills which determines the sizes andlengths of the bars as appropriate.
The annual demand for Carbon steel is 40,000 pounds. Itsordering cost is $ 30.00 while it’s holding cost is 20% per unitper year of the price of Carbon Steel. Carbon steel are sold atdiscounted prices as follows:
Quantity range | Cost (C) |
Less than 2500 pounds | $ 0 .20 per pound |
2500 to 5000 pounds | $ 0.19 per pound |
5000 or more pounds | $ 0.18 per pound |
Which quantity should be ordered and at what cost?
