Operations Management
14th Edition
ISBN: 9781260238891
Author: Stevenson
Publisher: MCG
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Chapter 11, Problem 7P
SummerFun. Inc., produces a variety of recreation and leisure products. The
Use the following information to develop aggregate plans.
Develop an aggregate plan using each of the following guidelines and compute the total cost for each plan. Hint: You will need extra output in April and August to accommodate demand in the following months.
a. Use regular production. Supplement using inventory, overtime, and subcontracting as needed. No backlogs allowed.
b. Use a level strategy. Use a combination of backlogs, subcontracting, and inventory to handle variations in demand. There should not be a backlog in the final period.
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NowJuice, Inc. produces bottled pickle juice. A planner has developed an aggregate forecast for demand (in cases) for the next four months. Use the following information to develop an aggregate plan using the LEVEL strategy. Inventory holding cost is $1 per month per case and backlog cost is $5 per month per case. Beginning inventory is zero.
Month
May
June
July
August
Forecast
452
520
600
719
Cost Per Unit
Monthly Capacity
Regular Production
19.40
400
Overtime Production
1.5 x Regular Prod Cost
400
What is the TOTAL cost of the LEVEL plan over the planning horizon?
Correct Answer
51,588.6
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Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the production planner, has assembled the
following cost data and demand forecast:
Click the icon to view the demand forecast.
E Click the icon to view the cost data.
John's job is to develop an aggregate plan. The three initial options he wants to evaluate are:
• Plan A: a strategy that hires and fires personnel as necessary to meet the forecast.
• Plan B: a level strategy.
• Plan C: a level strategy that produces 1,000 cases per quarter and meets the forecast demand with inventory and subcontracting.
a) Which strategy is the lowest-cost plan?
Try hiring and layoffs (to meet the forecast) as necessary (enter your responses as whole numbers).
Hiring and Layoff Plan
Layoff
(Units)
Hire
Quarter
Forecast
Production
Inits)
1,300
1
1,700
Costs/Other Data
Previous quarter's output = 1,300 cases
Beginning inventory = 0 cases
Stockout cost of backorders = $140 per case
Inventory holding cost = $45 per…
manager has prepared a forecast of expected aggregate demand for the next six months. Develop an aggregate plan to meet this demand given this additional information: A level production rate of 1000 units per month can be used. Backorders are allowed, and they are charged at the rate of $8 per unit per month. Inventory holding costs are $1 per unit per month based on maximum inventory. Determine the cost of this plan if regular time cost is $20 per unit, beginning inventory is zero, and initial backlog from previous plan is 100.
Month Forecast
1 800
2 100
3 1200
4 1100
5 1000
6 900
a. Prepare an aggregate plan.b. Prepare an aggregate plan if the management decided to switch to chase…
Chapter 11 Solutions
Operations Management
Ch. 11 - What three levels of planning involve operations...Ch. 11 - What are the three phases of intermediate...Ch. 11 - Prob. 3DRQCh. 11 - Why is there a need for aggregate planning?Ch. 11 - What are the most common decision variables for...Ch. 11 - Prob. 6DRQCh. 11 - Briefly discuss the advantages and disadvantages...Ch. 11 - What are the primary advantages and limitations of...Ch. 11 - Briefly describe the planning techniques listed as...Ch. 11 - What are the inputs to master scheduling? What are...
Ch. 11 - Prob. 11DRQCh. 11 - What general trade-offs are involved in master...Ch. 11 - Who needs to interface with the master schedule...Ch. 11 - How has technology had an impact on master...Ch. 11 - Service operations often face more difficulty in...Ch. 11 - Name several behaviors related to aggregate...Ch. 11 - Compute the total cost for each aggregate plan...Ch. 11 - A manager would like to know the total cost of a...Ch. 11 - Determine the total cost for this plan given the...Ch. 11 - a. Given the following forecast and steady regular...Ch. 11 - Manager T. C. Downs of Plum Engines, a producer of...Ch. 11 - Manager Chris Channing of Fabric Mills, Inc., has...Ch. 11 - SummerFun. Inc., produces a variety of recreation...Ch. 11 - Nowjuice, Inc., produces Shakewell fruit juice. A...Ch. 11 - Wormwood, Ltd., produces a variety of furniture...Ch. 11 - Refer to Solved Problem 1. Prepare two additional...Ch. 11 - Refer to Solved Problem 1. Suppose another option...Ch. 11 - Prob. 12PCh. 11 - Prob. 13PCh. 11 - Prob. 14PCh. 11 - Prob. 15PCh. 11 - Refer to Example 3. Suppose that regular-time...Ch. 11 - Prob. 17PCh. 11 - Prob. 18PCh. 11 - Prepare a master production schedule for...Ch. 11 - Update the master schedule shown in Figure 11.11...Ch. 11 - Prepare a master schedule like that shown in...Ch. 11 - Determine the available-to-promise (ATP)...Ch. 11 - Prepare a schedule like that shown in Figure 11.12...Ch. 11 - The objective is to choose the plan that has the...Ch. 11 - Prob. 2CQ
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