An aggregate plan is to be developed for the forecast of demand covering nine periods shown in Table below. Other relevant production and cost information is also provided. Find the cost associated with an aggregate plan that involves varying the size of the work force in order to have a production rate that matches demand. Note: Since this plan does not allow for any inventory build-up, a decision has been made to carry 10 units of safety stock, but no overtime or subcontract labour is used. Table showing Demand, production, and cost information
An aggregate plan is to be developed for the forecast of demand covering nine periods shown in Table below. Other relevant production and cost information is also provided. Find the cost associated with an aggregate plan that involves varying the size of the work force in order to have a production rate that matches demand. Note: Since this plan does not allow for any inventory build-up, a decision has been made to carry 10 units of safety stock, but no overtime or subcontract labour is used. Table showing Demand, production, and cost information
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Transcribed Image Text:QUESTION TWO
An aggregate plan is to be developed for the forecast of demand covering nine periods shown in
Table below. Other relevant production and cost information is also provided. Find the cost
associated with an aggregate plan that involves varying the size of the work force in order to have a
production rate that matches demand.
Note: Since this plan does not allow for any inventory build-up, a decision has been made to carry 10
units of safety stock, but no overtime or subcontract labour is used.
Table showing Demand, production, and cost information
Month
Jan. Feb. Mar. April May June
July Aug. Sept.
Total
Forecast 40 25
30
60 40
55
30
50
30
360
Production information
Cost information
Current number of workers
Worker time/month
Time to produce one unit
10
Hiring cost
K600/employee
160 hrs
Layoff cost
K500/employee
40 hrs
Regular time cost
K30/hr
Individual worker output
Overtime cost
K45/hr
(160 hr/month/40 hr/unit)
Subcontract labour K50/hr
4 units
cost
Safety stock of inventory
10 units Inventory carrying
K35/period
required
cost
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