EBK PRINCIPLES OF OPERATIONS MANAGEMENT
EBK PRINCIPLES OF OPERATIONS MANAGEMENT
10th Edition
ISBN: 8220102744059
Author: HEIZER
Publisher: PEARSON
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Chapter 13, Problem 18P
Summary Introduction

To determine: The minimum cost using the transportation method.

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

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Oliver Munday has developed the following supply, demand, cost and inventory data (provided below). He has requested you to allocate production capacity to meet demand at minimum cost using the transportation method. Determine the cost of the plan. Assuming the initial inventory has no holding cost in the first period and backorders are not permitted. Use the provided information to answer the questions. Initial Inventory 20 units Regular-time cost per unit R100 Overtime cost per unit R150 Subcontract cost per unit R200 Carrying cost per unit R4 Period Regular Time Overtime Sub-contract Demand Forecast 1 30 10 5 40 2 35 12 5 50 3 30 10 5 40
Advise the MD, providing detailed explanation using the table above.
West Indies Batting Inc is again on the rise due to the increasing sale of cricket bats throughout the region. BATS R’ US, a cricket bat-making company located in Charlestown, Nevis has been at the forefront of this increasing sales for cricket bats. The monthly demand in sales at BATS R’ US is provided in the table below. 1. Compute a three-period moving average and a four-period moving average for weeks 5, 6, and 7. 2. Compute the MAD for both forecasting methods. 3. Which model is more accurate? 4. Forecast week 8 with the more accurate method. Month Sale of bats 1 119 2 147 3 189 4 217 5 133 6 119 7 147
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