Logistical Inventory Control
ASSIGNMENT: Assume you have been given the job to develop an effective approach to the problem. First, here is the forecast developed by Marketing:
|
Month
|
1
|
2
|
3
|
4
|
5
|
6
|
|
Forecasted Demand
|
600
|
750
|
1000
|
850
|
750
|
700
|
The production manager said there were currently 50 units in inventory, and they would like to end the 6 months with only 25 in inventory. He also said that currently each worker produces an average of 25 pumps in any given month. There are currently 20 workers in the medium-size pump area.
1. Using the data, develop a level production plan. How much extra cost (inventory and HR costs) are involved in this plan? What additional costs (both financial and nonfinancial) might be involved with such a plan?
2. Try to develop a possible hybrid plan that would accomplish the task with smaller total costs than either level or chase.
3. Based on your work, what would you recommend and why? What are some of the pros and cons of the solution you recommend?