Question

Wormwood, LTD produces a variety of furniture products. The planning committee wants to produce an aggregate plan for the next 6 months. Complete the spreadsheet cells colored in blue. Month 1 2 3 4 5 6 Demand 160 150 160 180 170 140 Demand Units Capacity Cost Per Unit Regular 150 150 150 150 160 160 Regular Units $50 Max Overtime 10 10 10 10 10 Overtime Units $75 Max Subcontract 10 10 10 10 10 10 Subcontract Units $80 Beginning inventory =0 Inventory, per period $4 Backorders not allowed Plan based on minimizing total cost with no layoffs Period 1 2 3 4 5 6 Totals Heuristic Demand 160 150 160 180 170 140 1. Work left to right Output 2. Total the demand From Regular 3. Total the regular time From Overtime 4. Create a delta line From Subcontract 5. Add overtime as the next least expensive From Inventory 6. Keep the cheapest alternative moving left to right Delta For example building ahead with overtime where there is capacity Inventory and holding inventory is less expensive than subcontracting. Starting Inv 0 0 0 0 0 0 7. Last period use less than full regular capacity Receipts Issues Ending Inv 0 0 0 0 0 0 Cost Regular $0 Overtime $0 Subcontract $0 Inventory $0 Total Cost $0 $0 $0 $0 $0 $0 $0

Answer 1

MONTH
	1	2	3	4	5	6
Demand	160	150	160	180	170	140
Capacity
Regular	150	150	150	150	160	160
Overtime	10	10	0	10	10	10
Production	160	160	160	160	170	140
Regular	150	150	150	150	160	140
Overtime	10	10	0	10	10	0
Subcontracting	0	0	10	10	0	0
Beginning inventory	0	0	10	10	0	0
Ending inventory	0	10	10	0	0	0

Cost of the plan

regular production =900 x50 =45000

overtime production =40 x75 = 3000

subcontracting = 20 x80 =3200

Inventory cost = 20x4 =80

Total cost =51280