ChIV-AggregatePlanning_II-Sp10

ChIV-AggregatePlanning_II-Sp10 - Ex Ex 4. Level, Alternate...

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Unformatted text preview: Ex Ex 4. Level, Alternate Alternate solution Constraints: No shortages. Capacity 4000. Must have at least 600 units at the end of April. MGMT 46000 Operations Management (OM) Period Requirement Basic Plan Inventory 800 800 800 Jan. Feb. March 2000 4500 3400 2200 3500 2300 3875 2675 3875 4800 April 4300 May 2900 3400 -700 3400 -400 3400 1100 2500 June 2700 3400 0 3400 300 3400 1800 2500 Ch IV: Aggregate Planning – Par t II Ch Pl Adjustment I Inventory Adjustment II Inventory Final Plan 3400 3400 3400 1100 -300 -1200 3500 3500 3400 1300 0 -900 3875 3875 3775 2050 1125 600 3875 3875 3775 Inventory 800 2675 2050 1125 600 200 0 We will correct for March. Action: Add 100 units in the first 3 moths. Now we will correct for April. Add 375 units to first 4 months. 1800 left after June. Reduce 900 each from the last two months. ChIV‐AggregatePlanning‐Sp10 1 ChIV‐AggregatePlanning‐Sp10 12 MGMT 36100 MGMT 36100 Example 5 Chase Strategy Period Capacity Demand 1 5000 4250 Constraints: Cannot exceed capacity. Inventory cannot exceed 500. Soft constraint: Avoid shortages but if you cannot avoid, keep backordering as small as possible. Example 6 Do not exceed capacities. No shortages. Chase Strategy Period Capacity Demand Basic Plan Inventory Final Plan Inventory 1 5000 5000 0 5000 0 2 6000 6000 0 6000 0 3 8000 4 9000 5 6000 9000 9000 0 6000 0 6 11200 11000 11000 0 11000 0 11200 11200 11200 11200 8000 9000 0 0 8800 11200 800 3000 2 5000 4000 3 5000 4700 4 5000 5600 5 5000 4600 Basic Plan 4250 4000 4700 5600 4600 Inventory 0 0 0 0 0 Adjust. 1 4250 4300 5000 5000 4600 Inventory 0 300 600 0 0 Adjust. 2 4250 4200 5000 5000 4700 Inventory 0 200 500 -100 0 We will first take care of capacity (with no shortages). Then we will take care of inventory (with back ordering). Adjust. 2 gives a feasible plan. Basic plan: 3000 over capacity in P5, Adjustment: move 2200 to P4, 800 to P3. Basic plan: Capacity exceeded in P4. Move 300 to P3, 300 to P2. Adjust 1: Excess inventory in P3. Move 100 units from P2 to P5. Try this problem with the level strategy. ChIV‐AggregatePlanning‐Sp10 13 We will now calculate costs for the final plan. ChIV‐AggregatePlanning‐Sp10 14 MGMT 36100 MGMT 36100 Example 6 Budget Chase Strategy Period Capacity Regular Overtime SubSub-contract 6000 1200 4000 Capacity in P5 0 0 6000 Unit cost $1000 $1150 $1250 Example 6 Level Strategy: Do not exceed capacities. No shortages. Avg. requirement = (5000+6000+8000+9000+9000+11000) / 6 = 8000 Period Capacity Demand Basic Plan Basic Plan Inventory Final Plan Inventory 1 5000 8000 3000 8400 3400 2 6000 8000 8000 5000 8400 5800 3 8000 8000 8000 5000 8400 6200 4 9000 8000 8000 4000 8400 5600 5 6000 9000 8000 8000 3000 6000 2600 6 11200 11000 8000 8000 0 8400 0 1 2 3 4 5 6 Total 48000 Demand 5000 6000 8000 9000 Final Plan 5000 6000 8800 11200 Regular 5000 6000 6000 6000 OT 1200 - 1200 SC - 1600 4000 End Inventory 0 0 800 3000 Regular 5000 6000 6000 6000 OT 0 0 1380 1380 SC 0 0 2000 5000 Holding 0 0 48 180 Total 5000 6000 9428 12560 ChIV‐AggregatePlanning‐Sp10 9000 11000 6000 11000 0 6000 0 1200 6000 3800 0 0 0 6000 0 1380 7500 4750 0 0 7500 12130 11200 11200 11200 11200 Costs in thousand dollars Basic plan: 2000 more than capacity in P5. Move 2000 to other periods equally (400 each period). 52,618 15 We will now calculate costs for the final plan. ChIV‐AggregatePlanning‐Sp10 16 Unit holding cost: $60/ period MGMT 36100 MGMT 36100 ChIV-AggregatePlanning-Sp10 1 Example 6 Budget Level Strategy Period Demand Capacity Regular Overtime SubSub-contract 6000 1200 4000 Capacity in P5 0 0 6000 Unit cost $1000 $1150 $1250 Ex 6 Can we improve costs for the chase strategy budget of Ex. 5? Capacity Capacity in P5 Unit cost Regular 6000 1200 4000 3 8000 6000 1200 600 0 1600 800 4 9000 6000 1200 4000 3000 0 0 6000 5 6 $1000 $1150 $1250 Total 48000 Overtime SubSub-contract Period Requirement Basic plan plan Regular Overtime 1 5000 5000 6000 5000 0 0 0 2 6000 6000 6000 600 0 0 0 1 2 5000 6000 8400 8400 6000 6000 1200 1200 3 8000 8400 6000 1200 1200 6200 6000 1380 1500 372 4 9000 8400 6000 1200 1200 5600 6000 1380 1500 336 5 6 9000 11000 6000 0 0 6000 2600 0 0 7500 156 8400 6000 1200 1200 0 6000 1380 1500 0 Total 48000 Chase Strategy Final Plan Regular OT 9000 11000 6000 11000 0 0 6000 0 6000 1200 3800 0 8800 11200 SC 1200 1200 End Inventory 3400 5800 Regular 6000 6000 OT 1380 1380 SC 1500 1500 204 348 Holding Total ChIV‐AggregatePlanning‐Sp10 Costs in thousand dollars Subcontract Inventory 9216 7656 8880 9084 9228 9252 Unit holding cost: $60/ period MGMT 36100 53,316 17 Move 1000 SC units from P3 to P1 (regular). Savings: $130,000 Move 600 SC units from P3 to P2 (overtime). Savings: $24,000 Total savings: $154,000 Unit holding cost: $60 / period ChIV‐AggregatePlanning‐Sp10 MGMT 36100 18 Developing Aggregate Plan. For aggregate planning, we consider a number of periods; the total span is called the planning horizon. For planning, we can planning use different strategies: Chase, Level or a combination. Chase, Chase Strategy: produce quantity equal to aggregate demand for each period in order to keep inventory level zero. Advantages Investment in inventory is low Labor utilization in high Disadvantages The cost of adjusting output rates and/or workforce levels. Level Strategy: Produce quantity equal to the average requirement over the planning horizon. Advantages Stable output rates and workforce Disadvantages Greater inventory costs Effect of set up time There is one machine in the shop to produce two products: X, Y. Product X (standard product): 4 min/unit. Product Y: 3 min/unit Machine available: 7 hrs/day, 20 days/month or 140 hrs/month. hrs/day, We must produce X and Y in the ratio 1: 2 Preliminary calculations: Machine Capacity in term of standard product: = 140 [hrs/month] * 60 [ min/hr] / 4 [min/unit = 2100 [units/month] Production time division between X and Y: We must produce X and Y in the ratio 1: 2. One unit of X will take 4 minutes and two units of Y will take 6 minutes. Therefore, the production time should be divided in the ratio 4:6 or 40% to 60%. Questions: Suppose there is 1 hour set-up time when you change products. set--- How should we schedule, and what will be monthly production if Part (a) We need to maximize monthly production. Part (b) We must produce both products daily. 20 ChIV‐AggregatePlanning‐Sp10 21 ChIV‐AggregatePlanning‐Sp10 MGMT 36100 MGMT 36100 Example: Effect of set-up time setPart (a) We need to maximize monthly production. X S Y Example: cont.. Part (b) We must produce both products daily. X Y S S Y X Day 1 Day 2 Production time per month: 139 hours, set up time 1 hour. 139 hours = 139 * 60 = 8340 minutes. 40% of 8340 = 3336 min. We can produce 3336 / 4 = 834 units of X. 60% of 8340 = 5004 min. We can produce 5004 / 3 = 1668 units of Y. 834:1668 = 1:2 Time [Min. /unit] X Y 4.0 3.0 Production [units] 834 1668 Total Production in standard units 834 (1668 * 3)/4 = 1251 2085 Production time per day: 6 hours, set up time 1 hour. Production time per month = 120 hours 120 hours = 120 * 60 = 7200 minutes. 40% of 7200 = 2880 min. We can produce 2880 / 4 = 720 units of X. 60% of 7200 = 4320 min. We can produce 4320 / 3 = 1440 units of Y. 720:1440 = 1:2 Time Production Production in [units] standard units [Min. /unit] X 4.0 720 1440 Total 720 (1440 * 3)/4 = 1080 1800 Y 3.0 Capacity = 2100 Machine Capacity = 2100 [units/month] of standard product. ChIV‐AggregatePlanning‐Sp10 22 In aggregate planning we may want to reduce aggregate capacity by 10% to 15% to allow for set ups. ChIV‐AggregatePlanning‐Sp10 23 MGMT 36100 MGMT 36100 ChIV-AggregatePlanning-Sp10 2 ...
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This note was uploaded on 12/14/2010 for the course MGMT 361 taught by Professor Panwalker during the Spring '10 term at Purdue University-West Lafayette.

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