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Question:
••• 13.10 The S&OP team (see Problem 13.9) is considering two more mixed strategies. Using the data in Problem 13.9, compare plans C and D with plans A and B and make a recommendation.
► Plan C: Keep the current workforce steady at a level producing 1,300 units per month. Subcontract the remainder to meet demand. Assume that 300 units remaining from June are available in July.
► Plan D: Keep the current workforce at a level capable of producing 1,300 units per month. Permit a maximum of 20% overtime at a premium of $40 per unit. Assume that warehouse limitations permit no more than a 180-unit carryover from month to month. This plan means that any time inventories reach 180, the plant is kept idle. Idle time per unit is $60. Any additional needs are subcontracted at a cost of $60 per incremental unit.
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EBK OPERATIONS MANAGEMENT
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- QUESTION TWO An aggregate plan is to be developed for the forecast of demand covering nine periods shown in Table below. Other relevant production and cost information is also provided. Find the cost associated with an aggregate plan that involves varying the size of the work force in order to have a production rate that matches demand. Note: Since this plan does not allow for any inventory build-up, a decision has been made to carry 10 units of safety stock, but no overtime or subcontract labour is used. Table showing Demand, production, and cost information Month Jan. Feb. Mar. April May June July Aug. Sept. Total Forecast 40 25 30 60 40 55 30 50 30 360 Production information Cost information Current number of workers Worker time/month Time to produce one unit 10 Hiring cost K600/employee 160 hrs Layoff cost K500/employee 40 hrs Regular time cost K30/hr Individual worker output Overtime cost K45/hr (160 hr/month/40 hr/unit) Subcontract labour K50/hr 4 units cost Safety stock of…arrow_forwardQuestion 4 An alternative will have fixed costs of $10,000 per month, variable costs of $50 per unit, and revenue of $70 per unit. The break-even point volume is:arrow_forwardQuestion 3 List any five (5) costs prevalent in aggregate planning in the motor car industry.arrow_forward
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