EBK OPERATIONS MANAGEMENT
14th Edition
ISBN: 9781260718447
Author: Stevenson
Publisher: MCG COURSE
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Textbook Question
Chapter 11, Problem 4P
a. Given the following
Regular output = $20
Overtime = $30
Subcontract = $25
Average Inventory = $10
Backlog = $18
b. Suppose now that backlogs are not allowed. Modify your plan from part a to accommodate that new condition as economically as possible. The limits on overtime and subcontracting remain the same.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Note:-
Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism.
Answer completely.
Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the production planner, has assembled the following cost data and demand forecast:
demand forecast.
Quarter
Forecast
1
1,900
2
1,200
3
1,600
4
800
Costs/Other Data
Previous quarter's
output=1,200 cases
Beginning
inventory=0 cases
Stockout cost of
backorders=$160 per case
Inventory holding
cost=$40
per case at end of quarter
Hiring
employees=$35 per case
Terminating
employees=$80 per case
Subcontracting
cost=$65 per case
Unit cost on regular
time=$30 per case
Overtime
cost=$20 extra per case
Capacity on regular
time=1,900 cases per quarter
John's job is to develop an aggregate plan. The three initial options he wants to evaluate are:
•
Plan
A:
a strategy that hires and fires personnel as necessary to meet the forecast.
•
Plan
B:
a level strategy.
•
Plan
C:
a level strategy that…
A Pizza Company has a demand forecast for the next 12 months that is shown in Table 1
The current workforce of 100 staff can produce 1500 cases of pizzas per month.
(a) Prepare a production plan that keeps the output level. How much warehouse space would the company need for this plan?
(b) Prepare a demand chase plan. What implications would this have for staffing levels, assuming that the maximum amount of overtime would result in production levels of only 10 per cent greater than normal working hours?
Table 1 demand forecast
Month Demand (cases per month)
January 600
February 800
March 1000
April 1500
May 2000
June 1700
July…
Chapter 11 Solutions
EBK OPERATIONS MANAGEMENT
Ch. 11 - What three levels of planning involve operations...Ch. 11 - What are the three phases of intermediate...Ch. 11 - Prob. 3DRQCh. 11 - Why is there a need for aggregate planning?Ch. 11 - What are the most common decision variables for...Ch. 11 - Prob. 6DRQCh. 11 - Briefly discuss the advantages and disadvantages...Ch. 11 - What are the primary advantages and limitations of...Ch. 11 - Briefly describe the planning techniques listed as...Ch. 11 - What are the inputs to master scheduling? What are...
Ch. 11 - Prob. 11DRQCh. 11 - What general trade-offs are involved in master...Ch. 11 - Who needs to interface with the master schedule...Ch. 11 - How has technology had an impact on master...Ch. 11 - Service operations often face more difficulty in...Ch. 11 - Name several behaviors related to aggregate...Ch. 11 - Compute the total cost for each aggregate plan...Ch. 11 - A manager would like to know the total cost of a...Ch. 11 - Determine the total cost for this plan given the...Ch. 11 - a. Given the following forecast and steady regular...Ch. 11 - Manager T. C. Downs of Plum Engines, a producer of...Ch. 11 - Manager Chris Channing of Fabric Mills, Inc., has...Ch. 11 - SummerFun. Inc., produces a variety of recreation...Ch. 11 - Nowjuice, Inc., produces Shakewell fruit juice. A...Ch. 11 - Wormwood, Ltd., produces a variety of furniture...Ch. 11 - Refer to Solved Problem 1. Prepare two additional...Ch. 11 - Refer to Solved Problem 1. Suppose another option...Ch. 11 - Prob. 12PCh. 11 - Prob. 13PCh. 11 - Prob. 14PCh. 11 - Prob. 15PCh. 11 - Refer to Example 3. Suppose that regular-time...Ch. 11 - Prob. 17PCh. 11 - Prob. 18PCh. 11 - Prepare a master production schedule for...Ch. 11 - Update the master schedule shown in Figure 11.11...Ch. 11 - Prepare a master schedule like that shown in...Ch. 11 - Determine the available-to-promise (ATP)...Ch. 11 - Prepare a schedule like that shown in Figure 11.12...Ch. 11 - The objective is to choose the plan that has the...Ch. 11 - Prob. 2CQ
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- PLEASE PROVIDE DETAILED EXPLANATIONSarrow_forward14.26. Calculate the available-to-promise row in the following matrix: Period On Hand = 100 1 2 3 4 5 6 Forecast 50 100 50 100 50 100 Customer Orders 50 125 75 175 45 15 Master Production 200 200 Schedule Available-to-Promisearrow_forwardCaluclate Total Cost of Hiringsarrow_forward
- Give typed full explanation not a single word hand written otherwise leave itarrow_forwardCapacity planning requires a demand forecast for an extended period of time into the future. What concerns would you have regarding an extended forecast as a capacity planner?arrow_forwardA. What are some sources of demand variation B. Describe three classical strategies for capacity and demand planning and managementarrow_forward
- Operation managemetnarrow_forwardPlan production for a four-month period (February through May). Given information: For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workersneeded for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are 100 workers on January 31. You are given the following demand forecast: February, 80,000; March, 64,000; April, 100,000; May, 40,000. Productivity is four units per worker hour, eight hours per day, 20 days per month. Assume zero inventory on February 1. Costs are hiring, $50 per new worker; layoff, $70 per worker laid off; inventory holding, $10 per unit-month; straight-time labor, $10 per hour; overtime, $15 per hour; backorder, $20 per unit.arrow_forwardAPP Trial and Error -- Level Production Given the following forecasted demands with no capacity limits and no beginning inventory: Quarter Demand 200 900 1 234 Trial and Error is to be used to determine a production plan with a Level Production strategy. How many units will be produced by Regular Production in the 1st quarter? O.200 O 300 400 500 600 800 500 O 700arrow_forward
- This company has the following aggregate demand requirements and other data for the upcoming four quarters. Quarter Demand Previous quarter's output 1500 units 1 1400 Beginning inventory 200 units 2 1000 Stockout cost $50 per unit 3 1500 Inventory holding cost $8 per unit at end of quarter 4 1300 Hiring workers $5 per unit Laying off workers $10 per unit Unit cost $30 per unit Overtime $10 extra per unit Which of the following production plans is better: Plan 1—chase demand by hiring and layoffs; or Plan 2—produce at a constant rate of 1200 and obtain the remainder from overtime? Finish the calculation. Plan 1. Demand Regular Time Capacity Regular Time Production Hire Fire Initial Inventory Period 1 1,400 1200 Period 2 1,000 Period 3 1,500 Period 4 1,300…arrow_forward1. David Villa Manufacturing has the following demand aggregate requirements And other data for the next four periods: Quarter Forecast 1 1400 2 1200 3 1600 4 1500 COSTS/OTHER DATA Previous quarter’s output = 1,300 cases Beginning inventory = 0 cases Stock out cost = $50 per case Inventory holding cost = $10 per case at end of quarter Hiring employees = $40 per case Terminating employees = $80 per case Subcontracting cost = $60 per case Unit cost on regular time = $30 per case Overtime cost = $15 extra per case Capacity on regular time = 1,800 cases per quarter The three initial options he wants to evaluate are: Plan A: a strategy that hires and fires personnel as necessary to meet the forecast. Plan B: a level strategy. Plan C: a level strategy that produces 1,350 cases per quarter and meets the forecast demand with inventory and subcontracting. Which strategy is the lowest-cost plan? If you are…arrow_forwardPlan production for a four-month period: February through May. For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers needed for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are 100 workers on January 31. You are given the following demand forecast: February, 90,000; March 65,000; April 110,000; May, 55,000. Productivity is four units per worker hour, eight hours per day, 20 days per month. Assume zero inventory on February 1. Costs are hiring, $50 per new worker; layoff, $70 per worker laid off; inventory holding, $10 per unit-month; straight-time labor, $10 per hour; overtime, $15 per hour; backorder, $20 per unit a. Find the total cost of this plan?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Inventory Management | Concepts, Examples and Solved Problems; Author: Dr. Bharatendra Rai;https://www.youtube.com/watch?v=2n9NLZTIlz8;License: Standard YouTube License, CC-BY