hr_om11_ism_ch13

From a practical viewpoint plans 1 5 and 6 will

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Unformatted text preview: day 1.6 Plan 1 Carrying  cost Reg. time Overtime Subcont. Hire Layoff Total cost Plan 2 Plan 3 Plan 4 Plan 5 Plan 6 9,250 0 0 400 0 0 99,200 75,392 99,200 79,360 59,520 69,440 0 0 0 33,728 49,600 0 0 29,870 0 0 0 37,200 0 0 9,000 0 0 0 0 0 9,600 0 0 0 108,450 105,152 117,800 113,488 109,120 106,640 Based simply upon total cost, Plan 2 is preferable. From a practical viewpoint, Plans 1, 5, and 6 will likely have equivalent costs. Practical implementation of Plan 2 may, for example, require the employment of eight full-time employees, rather than seven fulltime and one part-time employee. When several plans have roughly equivalent costs, other parameters gain importance—such as the amount of control one would have over production and excess wear on equipment and personnel. Plan 3 should be avoided. 13.3 Period 1 2 3 4 5 6 7 8 Expected Demand  1,400  1,600  1,800  1,800  2,200  2,200  1,800  1,800 14,600 CHAPTER 13 A G G R E G A T E P L A N N I N G 191 13.3 (cont’d) Plan A Period Production (Demand of Previous Month) Demand (Dec) 1,600 1,400 1,600 1,800 1,800 2,200 2,200 1,800 1,800 1 (Jan) 2 (Feb) 3 (Mar) 4 (Apr) 5 (May) 6 (June) 7 (July) 8 (Aug) 1,600 1,400 1,600 1,800 1,800 2,200 2,200 1,800 Inventory (Units) Stockout Hire Layoff Personnel (Units) (Units) (Units) Cost 200 400 200 400 400 400 1,400 @ $20 =$28,000 200 200 200 400 $15,000 (cost t...
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