Answered: Identify the two categories of…

Business

Operations Management

Identify the two categories of aggregate planning strategies,and explain the difference between them.

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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Concept explainers

Forecasting

Forecasting is a methodology that uses historical data as inputs to make well-informed predictions about the course of future trends. Forecasting is the method of making forecasts based on historical and current data, most commonly by trend analysis. In the business world, forecasting is a basic statistical task. Forecasting is used by businesses to decide how to allocate their budgets or prepare for expected expenditures in the future. Forecasts help managers formulate and execute production plans by providing forecasts. The primary goal of forecasting is to make accurate predictions.

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Describe in detail what are the aggregate planning goal's?
How does aggregate planning contribute to overall cost reduction and efficiency improvement?
. Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must developan aggregate plan given the forecast for engine demand shown in the table. The department has aregular output capacity of 130 engines per month. Regular output has a cost of $60 per engine. Thebeginning inventory is zero engines. Overtime has a cost of $90 per engine.a. Develop a chase plan that matches the forecast and compute the total cost of your plan. Regularproduction can be less than regular capacity. b. Compare the costs to a level plan that uses inventory to absorb fluctuations. Inventory carryingcost is $2 per engine per month. Backlog cost is $90 per engine per month. There should not bea backlog in the last month.MONTH1 2 3 4 5 6 7 8 TotalForecast 120 135 140 120 125 125 140 135 1,040
Southeast Soda Pop, Inc., has a new fruit drink forwhich it has high hopes. John Mitten thai, the production planner,has assembled the fo llowing cost data and demand forecast: John's job is to develop an aggregate plan. The three initialoptions he wants to evaluate are:• Plan A: a strategy that hires and fires personnel as necessaryto meet the forecast.• Plan B: a level strategy.• Plan C: a level strategy that produces 1,200 cases per quarterand meets the fo recast demand with inventory and subcontracting.a) Which strategy is the lowest-cost plan?b) If you are John's boss, the VP for operations, which p lan doyou implement and why?
Q3 The Annual Business Meeting of FMCG Company was held in February 2020 where the company has set the target revenue goal for next year. The target revenue set was Rs 120Million which is 10% greater than the previous year target. The firm deals with one product which they plan to sell for Rs1000. Being a resource planning manager of the firm how will you translate the company annual business plan in to Aggregate Production Plan, Master Production Schedule and Material Requirement Planning? Explain your answer using Operations Planning Hierarchy?
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Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must develop an aggregate plan given the forecast for engine demand shown in the table. The department has a regular output capacity of 135 engines per month. Regular output has a cost of $60 per engine. The beginning inventory is zero engines. Overtime has a cost of $100 per engine. a. Develop a chase plan that matches the forecast and compute the total cost of your plan. Regular production can be less than regular capacity. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.) b. Compare the costs to a level plan that uses inventory to absorb fluctuations. Inventory carrying cost is $2 per engine per month. Backlog cost is $120 per engine per month. There should not be a backlog in the last month. Set regular production equal to the monthly average of total forecasted demand. Assume that using overtime is not an option. (Negative amounts…
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