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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
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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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
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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