QUESTION 1 AJ Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters. Quarter Demand 1 1300 2 1400 3 1500 4 1300 Previous quarter's output = 1,500units Beginning inventory = 200units Stockout costs = $50 per unit Inventory holding cost = $10 per unit at end of quarter Hiring workers = $4 per unit Firing workers = $8 per unit Unit cost = $30 per unit Overtime = $10 extra per unit a) Which of the following production plans is better: Plan A - chase demand by hiring and firing: or plan B - product at a constant rate of 1200 and obtain remainder from overtime? b) Explain the differences between repair and preventive maintenance? c) Explain the implications of each approach when developing an asset maintenance strategy? d) Explain the benfits and challenges associated with the implementation of an MRP system?
Breakeven Analysis
Break Even Analysis is a term used in business, cost accounting and economics. It refers to a point where the total cost incurred becomes equal to the total revenue earned. Break Even Analysis determines the number of units to be sold to earn the revenue required to cover the total costs. Total cost is a sum total of fixed and variable costs.
Process analysis
The term process analysis can be defined as breakdown of production process into different phases that converts inputs into output. A series of routine activities are incorporated using organizational resources with a view to achieve operational excellence.
QUESTION 1
AJ Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters.
| Quarter | Demand |
| 1 | 1300 |
| 2 | 1400 |
| 3 | 1500 |
| 4 | 1300 |
Previous quarter's output = 1,500units
Beginning inventory = 200units
Stockout costs = $50 per unit
Inventory holding cost = $10 per unit at end of quarter
Hiring workers = $4 per unit
Firing workers = $8 per unit
Unit cost = $30 per unit
Overtime = $10 extra per unit
a) Which of the following production plans is better: Plan A - chase demand by hiring and firing: or plan B - product at a constant rate of 1200 and obtain remainder from overtime?
b) Explain the differences between repair and preventive maintenance?
c) Explain the implications of each approach when developing an asset maintenance strategy?
d) Explain the benfits and challenges associated with the implementation of an MRP system?
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