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.