Production and Operations Analysis, Seventh Edition
7th Edition
ISBN: 9781478623069
Author: Steven Nahmias, Tava Lennon Olsen
Publisher: Waveland Press, Inc.
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Chapter 3.4, Problem 17P
Summary Introduction
To think critically about: Constrains in aggregate planning.
Introduction: Aggregate planning allows organizations to plan ahead. Aggregate planning’s objective is to manage the positives of producing to meet their demand within close proximities whilst tackling interferences caused by changes in production levels and the change in workforce levels.
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Students have asked these similar questions
A local machine shop employs 60 workers who have a variety of skills. The shopaccepts one-time orders and also maintains a number of regular clients. Discuss someof the difficulties with using the aggregate planning methodology in this context.
Deb Bishop Health and Beauty Products has developed a new shampoo and you need to develop its aggregate schedule. The cost accounting department has supplied you the cost relevant to the aggregate plan and the marketing department has provided a four-quarter forecast.
the four-quarter forecast.
Quarter
Forecast
1
1,400
2
1,100
3
1,700
4
1,300
aggregate plan.
Costs
Previous quarter's output
1,600
units
Beginning inventory
0
units
Stockout cost for backorders
$55
per unit
Inventory holding cost
$11
per unit for every unit held at the end of the quarter
Hiring workers
$50
per unit
Layoff workers
$75
per unit
Unit cost
$35
per unit
Overtime
$20
extra per unit
Subcontracting
Not available
Your job is to develop an aggregate plan for the next four quarters.
Part 2
a) Try hiring and layoffs (to meet the forecast) as necessary (enter your responses as whole…
Table below provides the demand forecast and production day information for an aggregate plan. Assume that no back orders are allowed in this case.
Month
January
February
March
April
May
June
Demand Forecast
3,000
4,500
3,400
2,500
4,000
3,200
Production Days
22
18
21
21
22
20
The costing information that is used to evaluate the total cost of each plan is as follows:• Inventory carrying cost: $4 per unit per month• Subcontracting cost per unit: $15 per unit• Working hours: 8 hours per day• Average pay rate: $12 per hour ($96 per day per worker)• Labour-hours to produce a unit: 2 hours per unit• Cost of increasing daily production rate (hiring and training): $300 per unit• Cost of decreasing daily production rate (layoffs): $700 per unitUse these information to formulate an aggregate plan. The firm would like to use level strategy: constant workforce for the aggregate planning. The firm chooses the average demand of the…
Chapter 3 Solutions
Production and Operations Analysis, Seventh Edition
Ch. 3.1 - Prob. 1PCh. 3.1 - Prob. 2PCh. 3.1 - Prob. 3PCh. 3.1 - Prob. 4PCh. 3.1 - Prob. 5PCh. 3.1 - Prob. 6PCh. 3.2 - Prob. 7PCh. 3.2 - Prob. 8PCh. 3.2 - Prob. 9PCh. 3.2 - Prob. 10P
Ch. 3.2 - Prob. 11PCh. 3.2 - Prob. 12PCh. 3.3 - Prob. 13PCh. 3.3 - Prob. 14PCh. 3.3 - Prob. 15PCh. 3.3 - Prob. 16PCh. 3.4 - Prob. 17PCh. 3.4 - Prob. 18PCh. 3.4 - Prob. 19PCh. 3.4 - Prob. 20PCh. 3.4 - Prob. 21PCh. 3.4 - Prob. 22PCh. 3.4 - Prob. 23PCh. 3.5 - Prob. 26PCh. 3.5 - Prob. 27PCh. 3.6 - Prob. 29PCh. 3.6 - Prob. 30PCh. 3 - Prob. 31APCh. 3 - Prob. 32APCh. 3 - Prob. 33APCh. 3 - Prob. 34APCh. 3 - Prob. 35APCh. 3 - Prob. 36AP
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- The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 1,400 May 2,200 February 1,600 June 2,200 March 1,800 July 1,800 April 1,800 August 1,400 Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $100 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-time costs. The plan is called plan C. Plan C: Keep a stable workforce by maintaining a constant production rate equal to the average gross requirements excluding initial inventory and allow varying inventory levels. Conduct your analysis for January through August. Part 2 The average monthly demand requirement=1775 units. (Enter your response as a whole number.) Part 3 In order to arrive at the costs, first compute the ending inventory and stockout units for each month by…arrow_forwardThe president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 1,400 May 2,300 February 1,700 June 2,100 March 1,600 July 1,900 April 1,700 August 1,300 Her operations manager is considering a new plan, which begins in January with 200units on hand and ends with zero inventory. Stockout cost of lost sales is $125per unit. Inventory holding cost is $25per unit per month. Ignore any idle-time costs. The plan is called plan B. Plan B: Produce at a constant rate of 1,300units per month, which will meet minimum demands. Then use subcontracting, with additional units at a premium price of $75per unit. Subcontracting capacity is limited to 1,000units per month. Evaluate this plan by computing the costs for January through August. Part 2 In order to arrive at the costs, first compute the ending inventory and subcontracting units for each month by…arrow_forwardThe president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 1,500 May 2,300 February 1,700 June 2,100 March 1,700 July 1,900 April 1,700 August 1,500 Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $125 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-time costs. The plan is called plan C. Plan C: Keep a stable workforce by maintaining a constant production rate equal to the average gross requirements excluding initial inventory and allow varying inventory levels. Conduct your analysis for January through August. The average monthly demand requirement=18001800 units. (Enter your response as a whole number.) In order to arrive at the costs, first compute the ending inventory and stockout units for each month by filling in…arrow_forward
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