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

6 hours per unit 400 300 per unit 100 600 per unit 300

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Unformatted text preview: st Information Production at Month 50 Units Inventory carry cost per Day $ 5 per hour ($40 per day) ($40 $ 7 per hour (above 8 hours per day) 1.6 hours per unit 100 0 1,850 Total units of inventory carried over from one Table 13.3 month to the next = 1,850 units Workforce required to produce 50 units per day = 10 workers Monthly Cost Information Costs Calculations Production at Demand Inventory Ending Month carry cost per Day $9,250 (= 1,850 unitsper Inventory 50 Units Forecast $ 5Change carried x $5 per unit month Inventory Inventory carrying per unit) unit $10 +200 per Subcontracting cost per unit Jan 1,100 900 200 Regular-time labor 49,600 (= 10 workers ($40 per day) $ 5 per hour x $40 400 Feb 700 +200 ($40 per Average pay rate 900 124 Mar 1,050 800 day7x+250 days) 650 $ per hour Overtime pay rate (above 8 hours per day) Other costs (overtime, Apr 1,050 1,200 -150 500 hiring, 1.6 hours per unit Labor-hours to produce a unit Labor- layoffs, May 1,100 1,500 -400 100 0 subcontracting) Cost of increasing daily production rate $300 per unit June and 1,000 1,100 -100 0 Total cost training) $58,850 (hiring 1,850 Cost of decreasing daily production rate $600 per unit (layoffs) Total units of inventory carried over from one month to the next = 1,850 units Workforce required to produce 50 units per day = 10 workers Table 13.3 Planning Example 1 Planning Planning Example 2 7,000 – Cumulative demand units 6,000 – Month Jan Feb Mar Apr May June Reduction of inventory 5,000 – Cumulative level production using average monthly forecast requirements 4,000 – 3,000 – 2,000 – Cumulative forecast requirements 1,000 – Expected Demand 900 700 800 1,200 1,500 1,100 6,200 Production Days 22 18 21 21 22 20 124 Demand Per Day (computed) 41 39 38 57 68 55 Table 13.2 Excess inventory Minimum requirement = 38 units per day – Jan Feb Mar Apr May June Figure 13.4 Production rate per working day Planning Example 2 Planning Example 2 Forecast demand Cost Information Inventory carrying c...
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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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