Posted: November 11th, 2015

Forecasting HR Demand for Installers

Forecasting HR Demand for Installers

A large kitchen cabinet and appliance distributor in the Southeast expects an

increase in annual sales during the next 10 years from $1,500,000 to $2,250,000.

In scanning its external environment, it notes that the local environment is

changing:

Many new employees have entered the market area
The population is aging; many are now “empty-nest” couples whose children have

moved away.  These individuals are remodeling their homes and seek larger, more

expensive kitchens.
Many new families have entered the area who are budget conscious and want a kitchen

to fit into their price range
Building costs are steady

The HR planner for the kitchen distributor wants to forecast the requirements for

installers for the next 10-year period.  Because installers require 8 months of on

the job training in addition to classroom instruction, an accurate forecast is

needed.  The CEO wants to use their own installers in the future rather than

relying on the more expensive outside subcontractors.  You must forecast demand by

determining the relationship between the sales of the distributor and the number of

installers required.   As such, you contact several distributors of various sizes

in the United States and obtain the following information:

Sales in Millions (S)                                                        Number

of Installers

1.0

4

1.5

7

2.0

9

2.5

15

3.0

17

Tasks

Plot these figures within WORD on a scatter plot.  Estimate a regression line.

That is, draw a line that cuts straight through the center of the points (one that

minimizes the distance between the lines and the plotted points).
Using your plot, estimate the number of installers needed for forecasted sales of

$2.25 million.
Answer in paragraph form:  Given the trends and the nature of the industry, what

other advice can you give the HR planner?  Review costs of kitchen renovations, age

of buyers, etc.
Answer in paragraph form:  Why might using the plotted information alone be risky?
Answer in paragraph form:  What other factors should you consider?  Why?
Describe the quantitative and qualitative techniques that are used to forecast

human resources demand.

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