Operations Management: Sustainability and Supply Chain Management (12th Edition)
Operations Management: Sustainability and Supply Chain Management (12th Edition)
12th Edition
ISBN: 9780134130422
Author: Jay Heizer, Barry Render, Chuck Munson
Publisher: PEARSON
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Chapter 13, Problem 15P
Summary Introduction

To determine: The minimum cost using transportation method.

Introduction: Aggregate planning using transportation method helps to attain the minimum cost with the optimal plan. The major advantage of transportation method is to achieve the optimal solution using optimal plans.

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QUESTION 1 Manager T. C. Downs of Plum Engines, a producer of lawnmowers 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 105 engines per month. Regular output has a cost of $65 per engine. The beginning inventory is zero engines. Overtime has a cost of $120 per engine. Month Total Forecast 95 100 115 400 Compare the costs to a level plan that uses inventory to absorb fluctuations. Inventory carrying cost is $3 per engine per month. Backlog cost is $100 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 celis blank - be certain to enter "0" wherever required. Round average inventory row, Inventory cost row, and Total row values to 1 decimal. Do not write the Dollar sign (S))
Q2) 3. What is long range plan?
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