Practice_Aggregate_Capacity_Problem

# Practice_Aggregate_Capacity_Problem - Aggregate Capacity...

This preview shows pages 1–3. Sign up to view the full content.

Michigan State University, 2004 - 1 - M Michigan State University, 2008 Aggregate Capacity Problem DeeRaj Inc. is preparing an aggregate production plan for next year. The company expects demand to be 1,000 units in quarter 1; 2,000 units in quarter 2; 4,000 units in quarter 3,; and 3,000 units in quarter 4. The company will have 750 units in inventory at the beginning of the year and desires to maintain that number at the end of each quarter as safety stock. Other information: Regular production cost = \$500 per unit Inventory carrying cost = \$10/unit/quarter based on quarter-ending inventory Hiring Cost = \$2,000 per worker Firing/layoff cost = \$3,000 per worker Beginning # of workers = 15 Each worker can produce 100 units per quarter. What is the total cost of a level plan? A chase plan (hiring and firing)? What is the savings of using the lowest cost plan?

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
Michigan State University, 2004 - 2 - M Michigan State University, 2008 Level Production Plan Beginning inventory =750 Beginning workers = 15 Qrtr. Demand Regular
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern