A. Planners for a company that makes several models of skateboards are about to prepare the aggregate plan that will cover six periods. They now want to evaluate a plan that calls for a steady rate of regular output, mainly using inventory to absorb the uneven demand but allowing some backlog. Overtime and subcontracting are not used because they want a steady output. They intend to start with zero inventory on hand in the first period. Prepare an aggregate plan and determine its cost using the following information. Assume a level of output rate of 300 units per period with regular time. Note that the planned ending inventory is zero. There are 15 workers, and each can produce 20 units per period. Period 1 2 3 4 5 6 Total Forecast 200 200 300 400 500 200 1800 Cost Information: Regular time = $2 per skateboard Overtime = $3 per skateboard Subcontract = $6 per skateboard Inventory = $1 per skateboard per period on average inventory Back orders = $5 per skateboard per period B. After reviewing the plan developed in part A above, planners have decided to develop an alternative plan. They have learned that one is about to retire from the company. Rather than replace that person, they would like to stay with the smaller workforce and use overtime to make up for lost output. The maximum amount of overtime output per period is 40 units. Develop a plan and compare it to the previous one.
A. Planners for a company that makes several models of skateboards are about to
prepare the aggregate plan that will cover six periods. They now want to
evaluate a plan that calls for a steady rate of regular output, mainly using
inventory to absorb the uneven demand but allowing some backlog. Overtime
and subcontracting are not used because they want a steady output. They intend
to start with zero inventory on hand in the first period. Prepare an aggregate plan
and determine its cost using the following information. Assume a level of output
rate of 300 units per period with regular time. Note that the planned ending
inventory is zero. There are 15 workers, and each can produce 20 units per
period.
Period 1 2 3 4 5 6 Total
Forecast 200 200 300 400 500 200 1800
Cost Information:
Regular time = $2 per skateboard
Overtime = $3 per skateboard
Subcontract = $6 per skateboard
Inventory = $1 per skateboard per period on average inventory
Back orders = $5 per skateboard per period
B. After reviewing the plan developed in part A above, planners have decided to
develop an alternative plan. They have learned that one is about to retire from the
company. Rather than replace that person, they would like to stay with the
smaller workforce and use overtime to make up for lost output. The maximum
amount of overtime output per period is 40 units. Develop a plan and compare it
to the previous one.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
