OPERATIONS MANAGEMENT >CUSTOM<
OPERATIONS MANAGEMENT >CUSTOM<
14th Edition
ISBN: 9781266767234
Author: Stevenson
Publisher: MCG CUSTOM
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Chapter 11, Problem 5P

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 130 engines per month. Regular output has a cost of $60 per engine. The beginning inventory is zero engines. Overtime has a cost of $90 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.

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 $90 per engine per month. There should not be a backlog in the last month.

Chapter 11, Problem 5P, Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must develop an

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