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

4 production rate per working day planning example 2

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Unformatted text preview: ost Level production using lowest monthly forecast demand 60 – 50 – $ 5 per unit per month Subcontracting cost per unit 70 – $10 per unit $ 5 per hour ($40 per day) ($40 Average pay rate $ 7 per hour (above 8 hours per day) 1.6 hours per unit 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– Jan Feb Mar Apr May June 22 22 18 21 21 22 20 = Month = Number of working days Table 13.3 Planning Example 2 Cost Information Inventory carry cost In-house production Subcontracting cost per unit Average pay rate Overtime pay rate Planning Example 2 Cost Information $ 5 per unit per month = 38 units per day $10 per unit x $ 5 perdays$40 per day) 124 hour ($40 ( = 4,712 units $ 7 per hour (above 8 hours per day) 1.6 hours per unit = 6,200 - 4,712 Cost of increasing daily production rate 1,488per unit $300 units = (hiring and training) Labor-hours to produce a unit Labor- Subcontract units Cost of decreasing daily production rate (layoffs) Table 13.3 $300 per unit $600 per unit $600 per unit Inventory carry cost In-house production Subcontracting cost per unit Average pay rate Overtime pay rate $ 5 per unit per month = 38 units per day $10 per unit x $ 5 perdays$40 per day) 124 hour ($40 ( = 4,712 units $ 7 per hour (above 8 hours per day) 1.6 hours per Calculations unit = 6,200 - 4,712 Regular-time labor $37,696= (= $300 orkers 7.6 w units Cost of increasing daily production rate 1,488per unit x $40 per (hiring and training) Costs Labor-hours to produce a unit Labor- Subcontract units day x 124 days) Cost of decreasing daily production rate (= $600 pernits x $10 per Subcontracting 14,880 1,488 u unit (layoffs) unit) Table 13.3 Total cost $52,576 Month Jan Feb Mar Apr May June Production Days 22 18 21 21 22 20 124 Expected Demand 900 700 800 1,200 1,500 1,100 6,200 Planning Example 3 Demand Per Day (computed) 41 39 38 57 68 55 Table 13.2 Production rate per working day Planning Example 3 Planning Forecast demand and monthly production 70 – 60 – 50 – 40 – 30 – 0– Jan Feb Mar Apr May June...
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This note was uploaded on 05/21/2011 for the course ECON 123 taught by Professor Day during the Spring '11 term at Arab Open University, Amman.

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