An organization wants to prepare an aggregate plan for its manufacturing facility. The relevant information is shown as follows:   Production time: 1 hour per unit  Beginning inventory: 500 units  Average labor cost: $10 per hour  Safety stock: 50% of monthly demand  Workweek: 5 days,  Shift length: 8 hours  Shortage cost: $20 per unit per month  Days per month: 20 work days/month  Carrying cost: $5 per unit per month Management prefers to keep a constant workforce and production level, absorbing variations in demand through inventory excesses and shortages. Demand not met is carried over to the following month. Develop an aggregate plan that will meet the demand and other conditions of the problem

Managerial Accounting: The Cornerstone of Business Decision-Making
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ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter11: Performance Evaluation And Decentralization
Section: Chapter Questions
Problem 39E: (Appendix 11A) Manufacturing Cycle Efficiency Kurena Company provided the following information on...
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Question 3: An organization wants to prepare an aggregate plan for its manufacturing facility. The relevant information is shown as follows: 
 Production time: 1 hour per unit
 Beginning inventory: 500 units
 Average labor cost: $10 per hour
 Safety stock: 50% of monthly demand
 Workweek: 5 days,
 Shift length: 8 hours
 Shortage cost: $20 per unit per month
 Days per month: 20 work days/month
 Carrying cost: $5 per unit per month
Management prefers to keep a constant workforce and production level, absorbing variations in demand through inventory excesses and shortages. Demand not met is carried over to the following month. Develop an aggregate plan that will meet the demand and other conditions of the problem

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