4266690-DMFD-3513-CH7-Aggregate-Capacity-Planning-R

1 mixing options to develop a plan chase strategy

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Unformatted text preview: demand Match forecast for each period Vary workforce levels or vary Vary production rate Favored by many service Favored organizations Graphical and Charting Methods Popular techniques Popular Easy to understand and use Easy Trial-and-error approaches that do Trial- andnot guarantee an optimal solution Require only limited computations Require Graphical and Charting Graphical Methods 1. Determine the demand for each period 2. Determine the capacity for regular time, overtime, and subcontracting each period 3. Find labor costs, hiring and layoff costs, and inventory holding costs 4. Consider company policy on workers and stock levels Planning Example 1 Month Jan Feb Mar Apr May June Expected Demand 900 700 800 1,200 1,500 1,100 6,200 Table 13.2 = Production rate per working day Planning Example 1 6,200 = 50 units per day 124 Planning Example 1 Forecast demand 60 – Cost Information Inventory carrying cost $ 5 per unit per month Subcontracting cost per unit Level production using average monthly forecast demand $10 per unit Average pay rate 50 – Overtime pay rate 40 – Labor-hours to produce a unit Labor- 30 – Cost of increasing daily production rate (hiring and training) Cost of decreasing daily production rate (layoffs) 0– Demand Per Day (computed) 41 39 38 57 68 55 Total expected demand Average requirement = Number of production days 5. Develop alternative plans and examine their total costs 70 – Production Days 22 18 21 21 22 20 124 Jan Feb Mar Apr May June 22 22 18 21 21 22 20 Figure 13.3 = Month = Number of working days Planning Example 1 Monthly Demand Inventory Ending Forecast $ 5Change per Inventory per unit month Subcontracting cost per unit Jan 1,100 $10 +200 per unit Feb Average pay rate 900 $ 5 per hour ($40 per day) +200 ($40 400 900 700 Mar 1,050 800 Overtime pay rate Apr 1,050 1,200 Labor-hours to produce a unit LaborMay 1,100 1,500 Cost of increasing daily production rate June and training) 1,000 1,100 (hiring (hiring and training) Cost of decreasing daily production rate (layoffs) 200 +250 650 $ 7 per hour (above 8 hours per day) -150 500 1.6 hours per unit -400 $300 per unit -100 $600 per unit $300 per unit $600 per unit Table 13.3 Planning Example 1 Co...
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