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    Assignment#2-Aggregate Planning

    Uploaded by

    Bb Vixen
    The document discusses two aggregate production plans for a skateboard company over six periods. The first plan keeps regular output steady at 300 units per period and uses inventory to meet uneven demand. The total cost is $3600. The second plan reduces regular output to 280 per period due to retirement, using up to 40 units of overtime each period. The total cost of this plan is $4700.

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    Assignment#2-Aggregate Planning

    Uploaded by

    Bb Vixen
    51 views2 pages
    The document discusses two aggregate production plans for a skateboard company over six periods. The first plan keeps regular output steady at 300 units per period and uses inventory to meet uneven demand. The total cost is $3600. The second plan reduces regular output to 280 per period due to retirement, using up to 40 units of overtime each period. The total cost of this plan is $4700.

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    Aggregate planning

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    The document discusses two aggregate production plans for a skateboard company over six periods. The first plan keeps regular output steady at 300 units per period and uses inventory to meet uneven demand. The total cost is $3600. The second plan reduces regular output to 280 per period due to retirement, using up to 40 units of overtime each period. The total cost of this plan is $4700.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    51 views2 pages

    Assignment#2-Aggregate Planning

    Uploaded by

    Bb Vixen
    The document discusses two aggregate production plans for a skateboard company over six periods. The first plan keeps regular output steady at 300 units per period and uses inventory to meet uneven demand. The total cost is $3600. The second plan reduces regular output to 280 per period due to retirement, using up to 40 units of overtime each period. The total cost of this plan is $4700.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 2

    AGGREGATE PLANNING

    Planners for a company that makes several models of skateboards are about to prepare the aggregate plan that will cover six periods. They have assembled the following information:

    Costs

    Output

    Regular time = $2 per skateboard

    Overtime. =. $3 per skateboard

    Subcontract. = $6 per skateboard

    Inventory. = $1 per skateboard per period on average inventory

    Backorders = $5 per skateboard per period

    They want to evaluate a plan that calls for a steady rate of regular-time output, mainly using inventory to absorb the uneven demand but allowing some backlog. Overtime and
    subcontracting are not used because they want steady output. They intend to start with zero inventory on hand in the first period. Prepare an aggregate plan and determine its cost
    using the preceding information. Assume a level output rate of 300 units (skateboards) per period with regular time (i.e. 1800/6=300). Note that the planned ending inventory is zero.
    There are 15 workers, and each can produce 20 skateboards per period.

    Strategy/Plan

    Period 1 2 3 4 5 6 Total Cost/ unit


    Forecast 200 200 300 400 500 200 1800
    Output: 300 300 300 300 300 300 1800
    Regular 300 300 300 300 300 300 1800 2
    Overtime 3
    Subcontract 6
    Output-Forecast 100 100 0 0 0 100
    Inventory

    Beginning 0 100 200 200 100 0


    Ending 100 200 200 100 0 0
    Average 50 150 200 150 50 0 600 1
    Backlog 100 100 5
    Total Cost

    After reviewing the plan developed above, planners have decided to develop an alternative plan. They have learned that one person is about to retire from the company. Rather than
    replace that person, they would like to stay with the smaller workforce and use overtime to make up for the lost output. The reduced regular-time output is 280 units per period. The
    maximum amount of overtime output per period is 40 units. Develop a plan and compare it to the above. Which plan has a lower cost?

    Strategy/Plan

    Period 1 2 3 4 5 6 Total Cost/ unit

    Forecast 200 200 300 400 500 200 1800

    Output:

    Regular 280 280 280 280 280 280 2

    Overtime 40 40 3

    Subcontract 6

    Output-Forecast 80 80 -20 -80 -180 80

    Inventory

    Beginning 0 80 200 180 100 0

    Ending 80 200 180 100 0 0

    Average 1

    Backlog 80 5

    Total Cost

    1
    Total Cost

    3600

    600

    500

    4700

    Total Cost

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