Assignment:
Consider the following Aggregate Planning problem.
| Cost data |
|
|
|
|
Demand forecast |
|
|
| Wage/hour |
$12 |
|
|
|
Month |
Demand |
Days/month |
| OT pay rate |
$18 |
|
|
|
1 |
2100 |
23 |
| Subcontracting rate/unit |
$50 |
|
|
|
2 |
2200 |
20 |
| Carrying cost/unit/Month |
$5 |
|
|
|
3 |
2400 |
23 |
| Hiring cost/unit |
$200.00 |
|
|
|
4 |
2600 |
22 |
| Firing cost/unit |
$150.00 |
|
|
|
5 |
2700 |
21 |
|
|
|
|
|
6 |
2800 |
23 |
|
|
|
|
|
7 |
3000 |
21 |
|
|
|
|
|
8 |
2700 |
22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other data |
|
|
|
|
Initial condition |
|
|
| Std. hours |
2 |
|
|
|
Workers on roll |
24 |
|
| Hours/day |
8 |
|
|
|
Current inventory |
110 |
|
| OT Limit |
20% |
|
|
|
Safety stock |
100 |
|
Note: Hiring/fining costs are based on change in daily production rate from one month to the next.
a. What is the production rate per worker per day?
b. What is the current production rate per day?
c. What is the wage rate per worker per day?
d. What is the OT production cost per unit?
e. What is the production rate per day with 25 workers? Round down to the nearest integer.
f. Assuming the same number of workers and daily production rate from (e) develop a “Mixed” plan with no ending inventory in excess of safety stock. Use overtime first to make up shortages if any, and then use subcontracting. Round overtime capacity down to the nearest integer. Prepare a summary of costs.
Provide complete and step by step solution for the question and show calculations and use formulas.