t5review - 100 50 50 Costs: Regular Breeding: 2400 x 100 =...

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Aggregate Planning Example: eDogs.com Ltd. has the following parameters and aggregate demand for the next 3 months. MONTH DEMAND 1 800 dogs 2 950 dogs 3 850 dogs Beginning inventory: 50 dogs Breeding cost: $100/dog Stock out cost: $50/dog Inventory cost: $20/dog per month Sub-contracting cost: $40 extra per dog Maximum of 50 dogs/month PLAN: Breed dogs at a constant rate of the minimum of the aggregate demands among the three. If it (regular breeding) is not enough, get a subcontractor to cover for the lack of dogs. Questions: 1. What is the incremental subcontracting cost? 2. What is the total cost of the plan?
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Common Errors: 1. deviating from the specified plan 2. not paying attention to the constraints 3. mixing up cost values 4. confusion between extra cost and total cost Deman d Beg. Inv Regula r Subcontra ct Stockout Ending Inv 1 800 50 800 0 0 50 2 950 50 800 50 50 0 3 850 0 800 50 0 0 TOTAL 2400
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Unformatted text preview: 100 50 50 Costs: Regular Breeding: 2400 x 100 = 240000 Subcontracting: a. extra/incremental: 40 x 100 = 4000 b. total subcontracting cost: 140 x 100 = 14000 (note: 140 is 100 regular cost + 40 incremental cost) Stockout: 50 x 50 = 2500 Inventory Cost: 50 x 20 = 1000 Total Cost: 240000 + 14000 + 2500 + 1000 = 257500 Linear Programming Model-refer to the picture shown in class (also found in the red book)-What does the picture say? 1. all mathematical programming (MP) problems are constrained optimization (CO) problems 2. not all CO are MP 3. all linear programming (LP) problems are MP 4. not all MP, or some MP, are LP 5. all integer programming (IP) problems are CO; some CO are IP 6. etc For CPM and PERT, please go to one of the review sessions if you dont understand it....
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This note was uploaded on 02/16/2011 for the course BUS 355 taught by Professor White during the Spring '11 term at UChicago.

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t5review - 100 50 50 Costs: Regular Breeding: 2400 x 100 =...

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