OPERATIONS MANAGEMENT IN SUPPLY CHAIN
7th Edition
ISBN: 9781264093069
Author: SCHROEDER
Publisher: MCG
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Chapter 11, Problem 11P
A small textile company makes several types of sweaters. Demand is very seasonal, as shown by the following quarterly demand estimates. Demand is estimated in terms of standard hours of production required.
All hour of regular time costs the company $12. Employees are paid $18 per hour 011 overtime, and labor can be subcontracted from the outside at $14 per hour. A maximum of 1000 overtime hours is available in any month. A change in the regular level of production (increase or decrease) incurs a onetime cost of $5 per hour for adding or subtracting an hour of labor. It costs 2 percent per month to carry an hour of finished work in inventory. Materials and overhead costs in inventory are equal to the direct labor costs. At the beginning of the fall quarter, there are 5000 standard hours in inventory and die workforce level is equivalent to 10,000 standard hours.
- a. Suppose management sets the level of regular workers for the year equal to the average demand and subcontracts out the rest. What is the cost of this strategy'?
- b. What is the cost of a chase strategy?
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The planner at a company that makes garden tractors is about to prepare an aggregate production plan that will cover the next 6 months. She has collected the following information:
Month
Demand Forecast Above the available capacity through permanent workforce
1
1,000
2
1,000
3
2,000
4
3,000
5
4,000
6
1,000
Total:
12,000
Production per month = 20 units per worker
Initial inventory = 500 units
Desired ending inventory (at the end of month 6) = 0 units
Cost:
Hire cost = $500 per temporary worker
Inventory = $10 per tractor per month
Backorder = $150 per tractor per month
The optimum aggregate plan is:
Month
1
2
3
4
5
6
Total
Forecast Demand above regular capacity
1,000
1,000
2,000
3,000
4,000
1,000
12,000
# of temporary workers required
50
50
100
150
200
50
Temp. Workers hired
25
25
50
75
0
0
Temp. workers laid off
0…
EZ-Windows, Inc. manufacturers replacement windows for the home remodeling business. In January, the company produces 15,000 windows and ended the month with 9,000 windows in inventory. EZ-Windows' management team would like to develop a production schedule for the next three months. A smooth production schedule is obviously desirable because it maintains the current workforce and provides a similar month-to-month operation. However, given the sales forecasts, the productioncapacities, and the storage capabilities as shown in Table 2, the management team does not think a smooth production schedule with the same production quantity each month possible.The company's cost accounting department estimates that increasing production by one window from one month to the next will increase total costs by $1.00 for each unit increase in the production level. In addition, decreasing production by one unit from one month to the next will increase total costs by $0.65 for each unit decrease in the…
Chapter 11 Solutions
OPERATIONS MANAGEMENT IN SUPPLY CHAIN
Ch. 11 - Prob. 1DQCh. 11 - Prob. 2DQCh. 11 - A school district has forecast student enrollment...Ch. 11 - Prob. 4DQCh. 11 - Prob. 5DQCh. 11 - SOP or aggregate planning sometimes is confused...Ch. 11 - The XYZ Company manufactures a seasonal product....Ch. 11 - Prob. 8DQCh. 11 - Every firm has multiple objectives such as good...Ch. 11 - Prob. 10DQ
Ch. 11 - Prob. 11DQCh. 11 - Suppose we are considering the question of how...Ch. 11 - The Ace Steel Mill estimates the demand for steel...Ch. 11 - A barbershop has the following demand for haircuts...Ch. 11 - Prob. 4PCh. 11 - Prob. 5PCh. 11 - eXcel The Chewy Candy Company would like to...Ch. 11 - A company produces to a seasonal demand, with the...Ch. 11 - Prob. 8PCh. 11 - Question: 9. The Restwell Motel in Orlando,...Ch. 11 - eXcel 10. The Ban go Toy Company produces several...Ch. 11 - A small textile company makes several types of...Ch. 11 - Valley View Hospital faces somewhat seasonal...
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