Question

Planners for a firm are about to prepare the aggregate plan for one particular product that will cover the next six periods. Demand over those six periods is expected to be: 250, 200, 400, 500, 550, and 300 for total demand of 2,200.

They have regular time capacity of 350 units per period and they plan to produce that many each period. They have unlimited overtime capacity. They wil only produce in overtime to prevent a backorder/backlog. They realize that this plan could result in some inventory at the end of the sixth period. Beginning inventory is zero.

Production costs per unit are as follows:

Regular time - $2.25

Overtime - $4.00

Inventory - $1.25

Backorders - $6.50

Prepare an aggregate plan and determine its cost. Use the plan you develop to answer the questions that follow.

1. What is the average inventory for period 1?

2. What is the average inventory for period 2?

3. What is the average inventory for period 3?

4. What is the average inventory for period 4?

5. What is the average inventory for period 5?

6. What is the average inventory for period 6?

7. What is the total cost for period 1? Round to two decimal places.

8. What is the total cost for period 2? Round to two decimal places.

9. What is the total cost for period 3? Round to two decimal places.

10. What is the total cost for period 4? Round to two decimal places.

11. What is the total cost for period 5? Round to two decimal places.

12. What is the total cost for period 6? Round to two decimal places.

13. What is the total cost for the plan? Round your answer to two decimal places.

Answer #1

Given the projected demands for the next six months, prepare an
aggregate plan that uses inventory, regular time and overtime,
subcontracting and backorders. The plan must wind up with
no units in ending inventory in Period 6. Regular time
capacity is 150 units per month. Overtime capacity and
subcontracting capacity are 20 units per month each. Overtime cost
is $30 per unit, subcontracting cost is 40 per unit, and backorder
cost is $20 per unit, inventory holding cost is $5...

Denver Tire Co. would like to develop a level and chase
aggregate plan using the following information:
Capacity = 900 tires/mo on regular time; 100 tires/mo
on overtime; 150 tires/mo subcontracting.
Beginning Inventory = 0 tires; Planned ending inventory = 100
tires.
Costs = Regular ($40/tire); Overtime ($50/tire); Subcontracting
($70/tire)
Carrying Cost = $2/tire/month; Backlog cost =
$20/tire.
a. Produce a level plan below that minimizes total
costs.
Month
Mar
Apr
May
Demand
800
1300
800
Total Cost of Level Plan =...

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...

Management
Instructions
- Ending inventory
target for Period
5
- Backorder
maximum if possible (after the first
period)
Regular shift production per employee per
period
The company's production strategy keeps the regular shift fully
utilized
40 Maximum overtime production per
period if
needed
Use Overtime before
Subcontractors
10 Maximum subcontractor production
per period if
needed
32 Initial
inventory
Aggregate
Plan
1
2
3
4 ...

Management
Instructions
- Ending inventory
target for Period
5
- Backorder
maximum if possible (after the first
period)
32 Regular shift production per
employee per
period
The company's production strategy keeps the regular shift fully
utilized
100 Maximum overtime production per period if
needed
Use Overtime before
Subcontractors
35 Maximum subcontractor production
per period if
needed
42 Initial
inventory
Aggregate
Plan
1
2
3 ...

Kindly, explaining is needed via solving it manually and in
excel :
Solve this Aggregate Planning Problem by minimizing the cost of
mathcing the capacity vaious options in various periods to the
future demand?
Find inventory cost, regular time cost, overtime cosr and
subcontract cost, and the total cost?
Sales Period
Mar
Apr
May
Demand
700
700
1100
Capacity:
Regular Time
700
700
700
OverTime
100
100
100
Subcontracting
200
200
100
Begening inventory is zero
0
Cost
Regular Time...

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...

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...

The King Co. makes product AKUA10 and SKUB10 and is preparing an
aggregate plan for the next two quarters. SKUA10 takes one labor
hour per unit to produce while SKUB takes two labor hours per unit
to produce. At the beginning of Quarter 1 (Q1) there are 150 units
of SKUA10 and 40 units of SKUB10 in inventory. There is no need for
any ending inventory at the end of Quarter 2 (Q2). The sales for
SKUA10 are forecasted to...

While the demand for regular fabric
has declined, the demand for medical-grade fabric has been surging
in the market. In response, the management at Fabric Mills quickly
bumped up the regular output of medical-grade fabric by reassigning
workers from the production of regular fabric and rehiring retired
workers. Table 2 shows the demand forecast and
capacity for medical-grade fabric. Note that overtime is limited to
20% of the regular capacity. The availability of subcontract is
also limited due to the...

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