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 8P
Nowjuice, Inc., produces Shakewell® fruit juice. A planner has developed an aggregate
Use the following information to develop aggregate plans.
Develop an aggregate plan using each of the following guidelines and compute the total cost for each plan. Which plan has the lowest total cost? Note: Backlogs are not allowed.
a. Use level production. Supplement using overtime as needed.
b. Use a combination of overtime (500 cases per period maximum), inventory, and subcontracting (500 cases per period maximum) to handle variations in demand.
C. Use overtime up to 750 cases per period and inventory to handle variations in demand.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
NowJuice, Inc. produces bottled pickle juice. A planner has developed an aggregate forecast for demand (in cases) for the next four months. Use the following information to develop an aggregate plan using the LEVEL strategy. Inventory holding cost is $1 per month per case and backlog cost is $5 per month per case. Beginning inventory is zero.
Month
May
June
July
August
Forecast
452
520
600
719
Cost Per Unit
Monthly Capacity
Regular Production
19.40
400
Overtime Production
1.5 x Regular Prod Cost
400
What is the TOTAL cost of the LEVEL plan over the planning horizon?
Correct Answer
51,588.6
CAN SOMEONE SHOW ME HOW THEY GOT THE ANSWER 51588.6
Deb Bishop Health and Beauty Products has developed a new shampoo and you need to develop its aggregate schedule. The cost accounting department has supplied you the cost relevant to the aggregate plan and the marketing department has provided a four-quarter forecast.
the four-quarter forecast.
Quarter
Forecast
1
1,400
2
1,100
3
1,700
4
1,300
aggregate plan.
Costs
Previous quarter's output
1,600
units
Beginning inventory
0
units
Stockout cost for backorders
$55
per unit
Inventory holding cost
$11
per unit for every unit held at the end of the quarter
Hiring workers
$50
per unit
Layoff workers
$75
per unit
Unit cost
$35
per unit
Overtime
$20
extra per unit
Subcontracting
Not available
Your job is to develop an aggregate plan for the next four quarters.
Part 2
a) Try hiring and layoffs (to meet the forecast) as necessary (enter your responses as whole…
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:
Click the icon to view the demand forecast.
E Click the icon to view the cost data.
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 produces 1,000 cases per quarter and meets the forecast demand with inventory and subcontracting.
a) Which strategy is the lowest-cost plan?
Try hiring and layoffs (to meet the forecast) as necessary (enter your responses as whole numbers).
Hiring and Layoff Plan
Layoff
(Units)
Hire
Quarter
Forecast
Production
Inits)
1,300
1
1,700
Costs/Other Data
Previous quarter's output = 1,300 cases
Beginning inventory = 0 cases
Stockout cost of backorders = $140 per case
Inventory holding cost = $45 per…
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
Additional Business Textbook Solutions
Find more solutions based on key concepts
2. Identify four people who have contributed to the theory and techniques of operations management.
Operations Management
2. In what circumstances might a market-pull approach or a technology-push approach to new-product design be th...
OPERATIONS MANAGEMENT IN THE SUPPLY CHAIN: DECISIONS & CASES (Mcgraw-hill Series Operations and Decision Sciences)
What is precedent, and how does it affect common law?
Business in Action
What is precedent, and how does it affect common law?
Business in Action (8th Edition)
2. Identify four people who have contributed to the theory and techniques of operations management.
Operations Management: Sustainability and Supply Chain Management (12th Edition)
Many companies including Company OM tried to implement dynamic pricing in their ticketing system. The dynamic p...
Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
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
- Deb Bishop Health and Beauty Products has developed a new shampoo and you need to develop its aggregate schedule. The cost accounting department has supplied you the cost relevant to the aggregate plan and the marketing department has provided a four-quarter forecast. the four-quarter forecast. Quarter Forecast 1 1,400 2 1,100 3 1,700 4 1,300 the costs relevant to the aggregate plan. Costs Previous quarter's output 1,600 units Beginning inventory 0 units Stockout cost for backorders $55 per unit Inventory holding cost $11 per unit for every unit held at the end of the quarter Hiring workers $50 per unit Layoff workers $75 per unit Unit cost $35 per unit Overtime $20 extra per unit Subcontracting Not available Your job is to develop an aggregate plan for the next four quarters. Part 2 a) Try hiring and layoffs (to meet the forecast) as necessary…arrow_forwardPlease help me obtain the answer of this question. Please provide me the solution/computation.arrow_forwardmanager has prepared a forecast of expected aggregate demand for the next six months. Develop an aggregate plan to meet this demand given this additional information: A level production rate of 1000 units per month can be used. Backorders are allowed, and they are charged at the rate of $8 per unit per month. Inventory holding costs are $1 per unit per month based on maximum inventory. Determine the cost of this plan if regular time cost is $20 per unit, beginning inventory is zero, and initial backlog from previous plan is 100. Month Forecast 1 800 2 100 3 1200 4 1100 5 1000 6 900 a. Prepare an aggregate plan.b. Prepare an aggregate plan if the management decided to switch to chase…arrow_forward
- 1. Develop an aggregate plan for the following forecast Period 3 4 5 6 7 Total 1 2 8 Forecast 190 230 260 280 210 170 160 260 180 1,940 There are 20 workers who can produce 10 units per period at a cost of P6.00 per unit. There is no beginning invetory and the cost of carrying inventory is P5.00 per unit per period. Backlog cost is P10.00 per unit per period. Will the present workforce able to produce the forecast? b. What is the total cost of the plan? a.arrow_forwardDeb Bishop Health and Beauty Products has developeda new shampoo, and you need to develop its aggregate schedule.The cost accounting department bas supplied you the costsrelevant to the aggregate plan, and the marketing department hasprovided a four-quarter forecast. All are shown as follows: Your job is to develop an aggregate plan for the next four quarters.a) First, try hiring and layoffs (to meet the forecast) as necessary.b) Then try a plan that holds employment steady.c) Which is the more economical plan for Deb Bishop Healthand Beauty Products?arrow_forwardDeb Bishop Health and Beauty Products has developed a new shampoo and you need to develop its aggregate schedule. The cost accounting department has supplied you the cost relevant to the aggregate plan and the marketing department has provided a four-quarter forecast. Click the icon to view the four-quarter forecast. Click the icon to view the costs relevant to the aggregate plan. Your job is to develop an aggregate plan for the next four quarters. a) Try hiring and layoffs (to meet the forecast) as necessary (enter your responses as whole numbers). More Info Hiring and Layoff Plan Hire Layoff Quarter Forecast Production (Units) (Units) 1,600 1 1,400 1400 0 200 2 1,000 1,000 0 400 3 1,600 1,600 600 0 4 1,200 ☑ More Info Previous quarter's output Beginning inventory Stockout cost for backorders Inventory holding cost Hiring workers Layoff workers Unit cost Overtime Subcontracting Costs 1,600 units $45 per unit O units $11 per unit for every unit held at the end of the quarter $50 per…arrow_forward
- Forecast Data is given within problem. Cost Data is attached 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: LOADING... Click the icon to view the demand forecast. LOADING... Click the icon to view the cost data. 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 produces 1,000 cases per quarter and meets the forecast demand with inventory and subcontracting. Part 2 a) Which strategy is the lowest-cost plan? Try hiring and layoffs (to meet the forecast) as necessary (enter your responses as whole numbers). Hiring and Layoff Plan Quarter Forecast Production Hire (Units) Layoff (Units)…arrow_forwardhelp:) thank you!! two partsarrow_forwardNeed only handwritten solution only (not typed one).arrow_forward
- 7-3. Nowjuice, Inc., produces Shakewell fruit juice. A planner has developed an aggregate forecast for demand (in cases) for the next eight months. month Apr forecast 4500 May 4400 Jun 6200 Jul 6400 Aug 5800 Sep 6600 Oct 7200 Nov 6900 Use the following information to develop aggregate plans. Regular production cost: $10.00 per case Regular production capacity: 5,000 cases Overtime production cost: $16 per case Subcontracting cost: $20 per case Holding cost: $1 per case per month Beginning inventory: 0 Develop an aggregate plan using each of the following guidelines and compute the total cost for each plan. Which plan has the lowest total cost? (a) Use level production of 5,000 case per month. Supplement using overtime as needed (b) Use a combination of overtime (500 cases per month for the first five months), inventory, and subcontracting (500 cases per month from September to November, if necessary) to handle variations in demand. Note that suitable amounts of overtime for the last…arrow_forwardA 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…arrow_forwarda. How much should be produced each period? b. What is ending inventory for each period? c. If inventory carrying cost is $3 per case per period based on ending inventory, what is the total cost of carrying inventory? d. What is the total plan cost and why? 4. The opening backlog is 1200 units. Forecast demand is shown below. a. Calculate the weekly production for level production if the backlog is to be reduced to 1000 units, b. Calculate the projected backlog for each week. Week 2 4 3 1200 1200 Forecast 1200 Demand Planned Production Projected Backlog 1200 1100 5 1100 25 20 6 1000 Total 5. A firm plans to make 400 wagons, 200 carts, and 100 sleds. The resource bill shown below displays the amount of critical resources needed to make one average unit of product family: Wood (Board Feet) Labor (Standard Hours) Product Wagon 0.75 0.50 1.00 Cart Sled 30 Calculate the total wood AND labor needed to make the total number of items in the product family.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