MyLab Operations Management with Pearson eText -- Access Card -- for Operations Management: Processes and Supply Chains
11th Edition
ISBN: 9780133885583
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
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Chapter D, Problem 21P
Summary Introduction
Interpretation: Assuming the given constraints, the optimal production plan, along with the workforce staffing plan is to be proposed.
Concept Introduction: The Company produces shovels for industrial and home-use.
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You are responsible of developing the six-month aggregate production plan at Sodas Galore, a
manufacturer of soft drinks. Your company makes three types of sodas: regular, diet and
super-caffeinated. All three types are made using the same production process, and the
switching costs can be ignored as they are so minimal. The S&OP team case created the
following forecast of demand for the next six months. In addition to the sales forecast, the
company has also developed planning values that are also shown in the next table.
Month
Sales Forecast (cases)
Softdrinks Planning Values
January
24,000
Current workforce
8 workers
32,000 Average monthly output per worker
32,000 Inventory holding cost
46,000 Regular wage rate
February
4,000 cases per month
$.30 per case per month
$20.00 per hour
March
April
May
60,000 Regular production hours/month
44,000 Overtime wage rate
160 hours
June
$30.00 per hour
240,000 Hiring cost
$1,000 per worker
$1.15 per case
Total
Subcontracting cost
Firing/layoff…
The Silver Star Bicycle Company will be manufacturing both men's and women's models of its Easy-Pedal 10-speed bicycles during the next two months.
Management wants to develop a production schedule indicating how many bicycles of each model should be produced in each month. Current demand
forecasts call for 150 men's and 125 women's models to be shipped during the first month and 200 men's and 150 women's models to be shipped during the
second month. Additional data are shown:
Production
Labor Requirements (hours)
Current
Model
Costs
Manufacturing
Assembly
Inventory
Men's
$120
2.0
1.5
20
Women's
$90
1.6
1.0
30
Last month the company used a total of 1000 hours of labor. The company's labor relations policy will not allow the combined total hours of labor
(manufacturing plus assembly) to increase or decrease by more than 100 hours from month to month. In addition, the company charges monthly inventory at
the rate of 2% of the production cost based on the inventory levels at the end of…
Capacity 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?
Chapter D Solutions
MyLab Operations Management with Pearson eText -- Access Card -- for Operations Management: Processes and Supply Chains
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