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SOP%20-%20Solver%20Soln

SOP%20-%20Solver%20Soln - Aggregate Planning Class Example...

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Aggregate Planning - Class Example - Version 1.0 INPUT THERE IS AN LP MODEL EMBEDDED IN THIS SHEET! RT Production Cost $6 OT Production Cost $8 Subcontracting Cost $10 Direct labor wage rate = [$(8-6)/0.5] per unit = $4/unit Inventory Holding Cos $4 Payroll cost per worker per quarter = ($4/unit)*(10 units/qr.) = $40 Hiring Cost $100 Layoff Cost $80 Subcontracting Limit 250 Decision Variables Payroll Cost $40 Constraints (LHS) Optimal Aggregate Plan OUTPUT Inventory Workforce RT OT Production Ending Workforce Balance Balance Cap. Cap. Quarter Demand RT OT Subcontr. Inventory Hires Layoffs Size = 0 = 0 <= 0 <= 0 (RHS) 0 200 10 1 100 0.00 0.00 0.00 100.00 0.00 0.00 10.00 0.00 0.00 -100.00 -25.00 2 200 111.11 0.00 0.00 11.11 1.11 0.00 11.11 0.00 0.00 0.00 -27.78 3 400 111.11 27.78 250.00 0.00 0.00 0.00 11.11 0.00 0.00 0.00 0.00 4 200 111.11 27.78 161.11 100.00 0.00 0.00 11.11 0.00 0.00 0.00 0.00 333.33 55.56 411.11 211.11 1.11 0.00 43.33 Total Relevant Cost = $7,511.11 This does not include the idle labor cost in quarter 1. The LP model is incomplete! (Without Idle Labor Cost) (Examine the formulae in the yellow cells to compare the spreadsheet model with the algebraic formulation) To account for idle labor cost, add 40*10, (i.e. $400) to the TRC above, (i.e. $7511.11) to obtain the actual TRC of
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