3325p11h13aggregate planning

Carrying costs are 2tiremonth if goods are carrying

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: cost $ 2 per tire per month 13 – 45 Transportation Example • Important points 1. Carrying costs are $2/tire/month. If goods are Carrying made in one period and held over to the next, holding costs are incurred. holding 2. Supply must equal demand, so a dummy column Supply called “unused capacity” is added. called 3. Because back ordering is not viable in this Because example, cells that might be used to satisfy earlier demand are not available. demand 13 – 46 Transportation Example 4. Quantities in each column designate the Quantities levels of inventory needed to meet demand requirements demand 5. In general, production should be allocated In to the lowest cost cell available without exceeding unused capacity in the row or demand in the column demand 13 – 47 Transportation Example DEMAND FOR Beginning inventory P e r i o d 1 P e r i o d 2 P e r i o d 3 Period 1 (Mar) Period 2 (Apr) Period 3 (May) 0 SUPPLY FROM Unused Capacity (dummy) 2 4 0 100 100 40 Regular time 42 44 700 Overtime 52 54 Subcontract 50 72 74 0 700 150 40 X 50 50 150 42 0 700 52 0 50 X 70 Subcontract 0 50 70 Overtime 0 700 50 Regular time 100 50 72 0 700 X 40 Regular time X X 0 X X 800 700 0 130 50 X 70 Subcontract TOTAL DEMAND 150 50 50 Overtime TOTAL CAPACITY AVAILABLE (supply) X 1,000 750 0 230 130 2,780 13 – 48 Aggregate Planning in Services ▶ Most services use combination strategies and Most mixed plans mixed ▶ Controlling the cost of labor is critical 1. Accurate scheduling of labor-hours to assure Accurate quick response to customer demand quick 2. An on-call labor resource to cover unexpected An demand demand 3. Flexibility of individual worker skills 4. Flexibility in rate of output or hours of work 13 – 49 Five Service Scenarios ▶ Restaurants 1. Smoothing the production process 2. Determining the optimal workforce size ▶ Hospitals ▶ Responding to patient demand ▶ National Chains of Small Service Firms ▶ Planning done at national level and at local Planning level level 13 – 50 Five Service Scenarios • Miscellaneous Services – – Plan human resource requirements Manage demand – – Extremely complex planning problem Involves number of flights, number of Involves passengers, air and ground personnel, allocation of seats to fare classes of Resources spread through the entire system • Airline industry – 13 – 51 Revenue Management ▶ Allocating re...
View Full Document

Ask a homework question - tutors are online