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    Macpherson Refrigeration Limited

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    Rendy Franata
    This document presents four alternatives for a company's production planning over a 12-month period to meet peak demand. Exhibit 1 shows a plan with varying production and labor to meet demand, resulting in the largest inventory, highest costs, and most overtime. Exhibit 2 keeps the workforce and overtime constant, but production cannot always meet demand. Exhibit 3 varies the workforce to meet demand at the lowest cost but creates no inventory. Exhibit 4 assumes constant production at maximum capacity, resulting in a large inventory and the second lowest costs.

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    Macpherson Refrigeration Limited

    Uploaded by

    Rendy Franata
    1K views14 pages
    This document presents four alternatives for a company's production planning over a 12-month period to meet peak demand. Exhibit 1 shows a plan with varying production and labor to meet demand, resulting in the largest inventory, highest costs, and most overtime. Exhibit 2 keeps the workforce and overtime constant, but production cannot always meet demand. Exhibit 3 varies the workforce to meet demand at the lowest cost but creates no inventory. Exhibit 4 assumes constant production at maximum capacity, resulting in a large inventory and the second lowest costs.

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    machperson

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    This document presents four alternatives for a company's production planning over a 12-month period to meet peak demand. Exhibit 1 shows a plan with varying production and labor to meet demand, resulting in the largest inventory, highest costs, and most overtime. Exhibit 2 keeps the workforce and overtime constant, but production cannot always meet demand. Exhibit 3 varies the workforce to meet demand at the lowest cost but creates no inventory. Exhibit 4 assumes constant production at maximum capacity, resulting in a large inventory and the second lowest costs.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    1K views14 pages

    Macpherson Refrigeration Limited

    Uploaded by

    Rendy Franata
    This document presents four alternatives for a company's production planning over a 12-month period to meet peak demand. Exhibit 1 shows a plan with varying production and labor to meet demand, resulting in the largest inventory, highest costs, and most overtime. Exhibit 2 keeps the workforce and overtime constant, but production cannot always meet demand. Exhibit 3 varies the workforce to meet demand at the lowest cost but creates no inventory. Exhibit 4 assumes constant production at maximum capacity, resulting in a large inventory and the second lowest costs.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 14

    exhibit 1

    Level production to meet peak demand


    month

    december

    production plan
    shipment forecast
    production plan
    shipments
    inventory
    extraordinary labor cost
    number of workers
    hirings
    layoffs
    workers month overtime
    cost of alternative 1
    hirings cost
    layoffs cost
    inventory holding cost
    labor cost
    regular
    overtime

    january

    february

    march

    4400
    8440
    4400

    4400
    8440
    4400

    6000
    8440
    6000

    240

    4280

    8320

    10760

    160

    211
    51
    0
    0

    211
    0
    0
    0

    211
    0
    0
    0

    cost
    quantity total
    $
    1,800
    51 $
    91,800
    $
    1,200
    0 $
    $
    8
    75000 $ 600,000
    $
    $

    2,400
    3,300

    2532 $ 6,076,800
    0 $
    $ 6,768,600

    april

    may

    june

    july

    august

    septemberoctober

    november

    8000
    8440
    8000

    6600
    8440
    6600

    11800
    8440
    11800

    13000
    8440
    13000

    11200
    8440
    11200

    10800
    8440
    10800

    7600
    8440
    7600

    6000
    8440
    6000

    11200

    13040

    9680

    5120

    2360

    840

    3280

    211
    0
    0
    0

    211
    0
    0
    0

    211
    0
    0
    0

    211
    0
    0
    0

    211
    0
    0
    0

    211
    0
    0
    0

    211
    0
    0
    0

    211
    0
    0
    0

    december totals

    5600
    8440
    5600

    95400
    101280
    95400

    6120

    75000

    211
    0
    0
    0

    2532
    51
    0
    0

    exhibit 2
    Chase production plan with constant workforce and overtime
    month

    december

    production plan
    shipment forecast
    production plan
    shipments
    inventory
    extraordinary labor cost
    number of workers
    hirings
    layoffs
    workers month overtime
    cost of alternative 1
    hirings cost
    layoffs cost
    inventory holding cost
    labor cost
    regular
    overtime

    january

    february

    march

    4400
    4160
    4400

    4400
    4400
    4400

    6000
    6000
    6000

    240

    160

    199
    39
    0
    0

    199
    0
    0
    0

    199
    0
    0
    0

    cost
    quantity total
    $
    1,800
    39 $
    70,200
    $
    1,200
    0 $
    $
    8
    0 $
    $
    $

    2,400
    3,300

    2388 $ 5,731,200
    375 $ 1,237,500
    $ 7,038,900

    april

    may

    june

    july

    august

    septemberoctober

    november

    8000
    8000
    8000

    6600
    6600
    6600

    11800
    11800
    11800

    13000
    13000
    13000

    11200
    11200
    11200

    10800
    10800
    10800

    7600
    7600
    7600

    6000
    6000
    6000

    199
    0
    0
    1

    199
    0
    0
    0

    199
    0
    0
    96

    199
    0
    0
    126

    199
    0
    0
    81

    199
    0
    0
    71

    199
    0
    0
    0

    199
    0
    0
    0

    7960

    december totals

    5600
    5600
    5600

    95400
    95160
    95400

    199
    0
    0
    0

    2388
    39
    0
    375

    exhibit 3
    Chase production plan with varying workforce
    month

    december

    production plan
    shipment forecast
    production plan
    shipments
    inventory
    extraordinary labor cost
    number of workers
    hirings
    layoffs
    workers month overtime
    cost of alternative 1
    hirings cost
    layoffs cost
    inventory holding cost
    labor cost
    regular
    overtime

    january

    february

    march

    4400
    4160
    4400

    4400
    4400
    4400

    6000
    6000
    6000

    240

    160

    104
    0
    56
    0

    110
    6
    0
    0

    150
    40
    0
    0

    cost
    quantity total
    $
    1,800
    256 $ 460,800
    $
    1,200
    276 $ 331,200
    $
    8
    0 $
    $
    $

    2,400
    3,300

    2379 $ 5,709,600
    0 $
    $ 6,501,600

    april

    may

    june

    july

    august

    septemberoctober

    november

    8000
    8000
    8000

    6600
    6600
    6600

    11800
    11800
    11800

    13000
    13000
    13000

    11200
    11200
    11200

    10800
    10800
    10800

    7600
    7600
    7600

    6000
    6000
    6000

    200
    50
    0
    0

    165
    0
    35
    0

    295
    130
    0
    0

    325
    30
    0
    0

    280
    0
    45
    0

    270
    0
    10
    0

    190
    0
    80
    0

    150
    0
    40
    0

    december totals

    5600
    5600
    5600

    95400
    95160
    95400

    140
    0
    10
    0

    2379
    256
    276
    0

    exhibit 4
    Aggregate plan for macpherson refrigeration limited
    month

    december

    production plan
    shipment forecast
    production plan
    shipments
    inventory
    extraordinary labor cost
    number of workers
    hirings
    layoffs
    workers month overtime
    cost of alternative 1
    hirings cost
    layoffs cost
    inventory holding cost
    labor cost
    regular
    overtime

    january

    february

    march

    4400
    8000
    4400

    4400
    8000
    4400

    6000
    8000
    6000

    240

    3840

    7440

    9440

    160

    200
    40
    0
    0

    200
    0
    0
    0

    200
    0
    0
    0

    cost
    quantity total
    $
    1,800
    139 $
    250,200
    $
    1,200
    0 $
    $
    8
    11680 $
    93,440
    $
    $

    2,400
    3,300

    2528 $ 6,067,200
    0 $
    $ 6,410,840

    inventory
    no problem because low cost
    overtime
    allow, but in a little because lead to inefficiency
    hiring/layoff not allow, because it is complicated

    april

    may

    june

    july

    august

    8000
    8000
    8000

    6600
    8000
    6600

    11800
    8000
    11800

    13000
    8000
    13000

    11200
    9160
    11200

    9440

    10840

    7040

    2040

    200
    0
    0
    0

    200
    0
    0
    0

    200
    0
    0
    0

    200
    29
    0
    0

    229
    70
    0
    0

    assumption
    there's no overtime, and layoff
    hiring 40 worker in the beginning
    all the production plan is in the maximal capacity (constant)
    remain inventory is no problem

    result
    the production plan excees the shipment or forecast
    create a big inventory in the ending
    there's no cost for overtime and layoff
    e lead to inefficiencycost for hiring only in the beginning, for 40 worker only
    compare
    exhibit 1
    exhibit 2
    exhibit 3
    Linda

    total production plan total cost


    total inventory
    101280 $
    6,768,600
    75000
    95160 $
    7,038,900
    0
    95160 $
    6,501,600
    0
    96000 $
    6,211,200
    47400

    september

    october

    november december totals

    10800
    11960
    10800

    7600
    8000
    7600

    6000
    8000
    6000

    5600
    8000
    5600

    95400
    101120
    95400

    1160

    1560

    3560

    5960

    11680

    299
    0
    0
    0

    200
    0
    0
    0

    200
    0
    0
    0

    200
    0
    0
    0

    2528
    139
    0
    0

    total overtime
    0
    375
    0
    0

    largest production, larger inventory, and quite expensive


    smaller production, many overtime, and the most expensive
    smaller production, no inventory, no overtime, and quite expensive
    larger production, large inventory, no overtime

    e expensive
    efficiency, but create the largest inventory, and the cost is more expensive
    most expensive
    not efficiency because of overtime
    e, and quite expensive efficiency but still more expensive
    efficiency, although create a large inventory, but still create the cheapest cost

    eapest cost

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