7. Nowjuice, Inc., produces Shakewell fruit juice. A planner has developed an aggregate forecast for demand (in cases) for the next six months. Month May Jun Jul Forecast 4,000 4,800 5,600 Aug Sep 7,200 Oct 6,400 5,000 Use the following information to develop aggregate plans. Regular production cost Regular production capacity Overtime production cost Subcontracting cost Holding cost Beginning inventory $10 per case 5,000 cases $16 per case $20 per case $1 per case per month 0 Develop an aggregate plan using each of the following guidelines and compute the total cost for each plan. Which plan has the lowest total cost? a. Use level production. Supplement using overtime as needed. b. Use a combination of overtime (500 cases per period maximum), inventory, and subcontracting (500 cases per period maximum) to handle variations in demand. c. Use overtime up to 750 cases per period and inventory to handle variations in demand.
7. Nowjuice, Inc., produces Shakewell fruit juice. A planner has developed an aggregate forecast for demand (in cases) for the next six months. Month May Jun Jul Forecast 4,000 4,800 5,600 Aug Sep 7,200 Oct 6,400 5,000 Use the following information to develop aggregate plans. Regular production cost Regular production capacity Overtime production cost Subcontracting cost Holding cost Beginning inventory $10 per case 5,000 cases $16 per case $20 per case $1 per case per month 0 Develop an aggregate plan using each of the following guidelines and compute the total cost for each plan. Which plan has the lowest total cost? a. Use level production. Supplement using overtime as needed. b. Use a combination of overtime (500 cases per period maximum), inventory, and subcontracting (500 cases per period maximum) to handle variations in demand. c. Use overtime up to 750 cases per period and inventory to handle variations in demand.
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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
Transcribed Image Text:7. Nowjuice, Inc., produces Shakewell fruit juice. A planner has developed an aggregate forecast for
demand (in cases) for the next six months.
Month
May
Jun
Jul
Forecast
4,000 4,800 5,600
Aug Sep
7,200
Oct
6,400
5,000
Use the following information to develop aggregate plans.
Regular production cost
Regular production capacity
Overtime production cost
Subcontracting cost
Holding cost
Beginning inventory
$10 per case
5,000 cases
$16 per case
$20 per case
$1 per case per month
0
Develop an aggregate plan using each of the following guidelines and compute the total cost for each
plan. Which plan has the lowest total cost?
a. Use level production. Supplement using overtime as needed.
b. Use a combination of overtime (500 cases per period maximum), inventory, and subcontracting
(500 cases per period maximum) to handle variations in demand.
c. Use overtime up to 750 cases per period and inventory to handle variations in demand.
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