Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must develop an aggregate plan given the forecast for engine demand shown in the table. The department has a regular output capacity of 135 engines per month. Regular output has a cost of $60 per engine. The beginning inventory is zero engines. Overtime has a cost of $100 per engine. a. Develop a chase plan that matches the forecast and compute the total cost of your plan. Regular production can be less than regular capacity. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.) b. Compare the costs to a level plan that uses inventory to absorb fluctuations. Inventory carrying cost is $2 per engine per month. Backlog cost is $120 per engine per month. There should not be a backlog in the last month. Set regular production equal to the monthly average of total forecasted demand. Assume that using overtime is not an option. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Round average inventory row, Inventory cost row, and Total row values to 1 decimal.)

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Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must develop an aggregate plan given the forecast for engine demand shown in the table. The department has a regular output capacity of 135 engines per month. Regular output has a cost of $60 per engine. The beginning inventory is zero engines. Overtime has a cost of $100 per engine.

a. Develop a chase plan that matches the forecast and compute the total cost of your plan. Regular production can be less than regular capacity. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.)

b. Compare the costs to a level plan that uses inventory to absorb fluctuations. Inventory carrying cost is $2 per engine per month. Backlog cost is $120 per engine per month. There should not be a backlog in the last month. Set regular production equal to the monthly average of total forecasted demand. Assume that using overtime is not an option. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Round average inventory row, Inventory cost row, and Total row values to 1 decimal.)

Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must develop an aggregate plan given the
forecast for engine demand shown in the table. The department has a regular output capacity of 135 engines per month. Regular
output has a cost of $60 per engine. The beginning inventory is zero engines. Overtime has a cost of $100 per engine.
Month
2
3
6
7
8
Total
Forecast
125
135
143
120
125
125
140
135
1,048
a. Develop a chase plan that matches the forecast and compute the total cost of your plan. Regular production can be less than
regular capacity. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "O" wherever
required.)
Period
1
2
3
4
6
7
8
Total
Forecast
125
135
143
120
125
125
140
135
1,048
Output
Regular
Overtime
Output - Forecast
Costs
Output
Regular
Overtime
Total
Transcribed Image Text:Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must develop an aggregate plan given the forecast for engine demand shown in the table. The department has a regular output capacity of 135 engines per month. Regular output has a cost of $60 per engine. The beginning inventory is zero engines. Overtime has a cost of $100 per engine. Month 2 3 6 7 8 Total Forecast 125 135 143 120 125 125 140 135 1,048 a. Develop a chase plan that matches the forecast and compute the total cost of your plan. Regular production can be less than regular capacity. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "O" wherever required.) Period 1 2 3 4 6 7 8 Total Forecast 125 135 143 120 125 125 140 135 1,048 Output Regular Overtime Output - Forecast Costs Output Regular Overtime Total
b. Compare the costs to a level plan that uses inventory to absorb fluctuations. Inventory carrying cost is $2 per engine per month.
Backlog cost is $120 per engine per month. There should not be a backlog in the last month. Set regular production equal to the
monthly average of total forecasted demand. Assume that using overtime is not an option. (Negative amounts should be indicated by
a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Round average inventory row, Inventory cost row,
and Total row values to 1 decimal.)
Period
1
4
8.
Total
Forecast
125
135
143
120
125
125
140
135
1,048
Output
Regular
Output - Forecast
Inventory
Beginning
Ending
Average
Backlog
Costs
Output
Regular
Inventory
Backorder
Total
Transcribed Image Text:b. Compare the costs to a level plan that uses inventory to absorb fluctuations. Inventory carrying cost is $2 per engine per month. Backlog cost is $120 per engine per month. There should not be a backlog in the last month. Set regular production equal to the monthly average of total forecasted demand. Assume that using overtime is not an option. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Round average inventory row, Inventory cost row, and Total row values to 1 decimal.) Period 1 4 8. Total Forecast 125 135 143 120 125 125 140 135 1,048 Output Regular Output - Forecast Inventory Beginning Ending Average Backlog Costs Output Regular Inventory Backorder Total
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