PRIN OF OPS MGMT  (LL) >C<
PRIN OF OPS MGMT (LL) >C<
17th Edition
ISBN: 9781323597767
Author: HEIZER
Publisher: PEARSON C
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Chapter 13, Problem 5P
Summary Introduction

To evaluate: Plan C

Introduction: The aggregate plan is the output of sales and operations planning. The major concern of aggregate planning is the production time and quantity for the intermediate future. Aggregate planning would encompass a time prospect of approximately 3 to 18 months.

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Planners for a company that makes several models of skateboards are about toprepare the aggregate plan that will cover six periods. They now want toevaluate a plan that calls for a steady rate of regular output, mainly usinginventory to absorb the uneven demand but allowing some backlog. Overtimeand subcontracting are not used because they want a steady output. They intendto start with zero inventory on hand in the first period. Prepare an aggregate planand determine its cost using the following information. Assume a level of outputrate of 300 units per period with regular time. Note that the planned endinginventory is zero. There are 15 workers, and each can produce 20 units per Period 1 2 3 4 5 6 Total Forecast 200 200 300 400 500 200 1800 Cost Information:Regular time = $2 per skateboardOvertime = $3 per skateboardSubcontract = $6 per skateboardInventory = $1 per skateboard per period on average inventoryBack orders = $5 per skateboard per period
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…
Plan production for a four-month period: February through May.  For February and March, you should produce to exact demand forecast.  For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers needed for March will be held constant through May.  However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur.  There are 100 workers on January 31.  You are given the following demand forecast: February, 90,000; March 65,000; April 110,000; May, 55,000.  Productivity is four units per worker hour, eight hours per day, 20 days per month.  Assume zero inventory on February 1.  Costs are hiring, $50 per new worker; layoff, $70 per worker laid off; inventory holding, $10 per unit-month; straight-time labor, $10 per hour; overtime, $15 per hour; backorder, $20 per unit a. Find the total cost of this plan?
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