APP-1

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 0 Hrs/mo/emp. 168 168 168 168 168 168 17.41 28.57 33.48 27.68 12.95 20.54 Emp. Req. (Integer) 18 29 34 28 13 21 Emp. Available 27 18 29 34 28 13 Hiring 0 11 5 0 0 8 Firing 9 0 0 6 15 0 275 275 375 450 400 225 275 $36288 $36288 $58464 $68544 $0 $2200 $1000 $0 $0 $1600 $4800 Costs of Firing $2250 $0 $0 $1500 $3750 $0 $7500 Inv. Costsd’Inv. $3300 $4500 $5400 $4800 $2700 $3300 $24000 Emp. Req. Fin. Inv. Fin. Costs of Salaries Costs Costs Hiring $56448 $26208 $42336 Total $288288 TOTAL = $324588 LEVEL STRATEGY LEVEL STRATEGY Jan. 1. Demand 2. Production 3. Hrs/mo 3. 4. In. Inv. 5. Fin. Inv. 6. Fin. Inv. (eliminate neg.) 6. 7. Backlogs (Mar. and Apr.) 8. Firing Costs salaries ($12) Costs Costs Firing ($250) Costs Inv. ($12) Costs Backlogs ($20) Feb. 1100 1100 1313 4032 400 613 613 0 3 $48,384 $750 $7,356 $0 1500 1313 4032 613 426 426 0 0 $48,384 $0 $5,112 $0 Mar. 1800 1313 4032 426 -61 0 61 0 $48,384 $0 $0 $1,220 Apr. May 1600 1313 4032 -61 -348 0 348 0 $48,384 $0 $0 $6,960 900 1313 4032 -348 65 65 0 0 $48,384 $0 $780 $0 Jun Total 1100 1310 4032 65 275 275 0 0 $48,384 $290,304 $0 $750 $3,300 $16,548 $0 $8,180 Total : $315,782 DETERMINING THE BEST PLAN The Total Cost of aggregate plan 1 (Chase Strategy) = $324,588 The Total Cost of aggregate plan 2 (Level Strategy) = $315,782 Given these two options the plan to be implemented is the one with the minimum cost Aggregate plan 2 using the Level Strategy. EXAMPLE 2 : THE THREE EXAMPLE 2 : THE THREE STRATEGIES Consider a company that experiences seasonal demand for its product family. The company estimates that the typical unit of its product requires 20 hours to produce. Each employee is estimated to c...
View Full Document

This document was uploaded on 02/10/2014.

Ask a homework question - tutors are online