3325p11h13aggregate planning

# Determine the demand for each period 2 determine the

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Unformatted text preview: Easy to understand and use ▶ Trial-and-error approaches that do not Trial-and-error guarantee an optimal solution guarantee ▶ Require only limited computations 13 – 32 Graphical Methods 1. Determine the demand for each period 2. Determine the capacity for regular time, Determine overtime, and subcontracting each period overtime, 3. Find labor costs, hiring and layoff costs, and Find inventory holding costs inventory 4. Consider company policy on workers and stock Consider levels levels 5. Develop alternative plans and examine their Develop total cost total 13 – 33 Roofing Supplier Example 1 Monthly Forecasts MONTH Jan Feb Mar Apr May June EXPECTED DEMAND PRODUCTION DAYS 900 700 800 1,200 1,500 1,100 6,200 DEMAND PER DAY (COMPUTED) 22 18 21 21 22 20 124 41 39 38 57 68 55 Total expected demand Average requirement = Number of production days = 6,200 = 50 units per day 124 13 – 34 Production rate per working day Roofing Supplier Example 1 Forecast demand production using average 70 – Levelonthly forecast demand m 60 – 50 – 40 – 30 – Jan 22 0– Feb Mar Apr 18 21 21 May June 22 20 = Month = Number of working days 13 – 35 Roofing Supplier Example 2 Cost Information Inventory carrying cost \$ 5 per unit per month Subcontracting cost per unit \$20 per unit Average pay rate \$10 per hour (\$80 per day) Overtime pay rate \$17 per hour (above 8 hours per day) Labor-hours to produce a unit 1.6 hours per unit Cost of increasing daily production rate (hiring and training) \$300 per unit Cost of decreasing daily production rate (layoffs) \$600 per unit c Plan 1 – o ce workfor nstant 13 – 36 Roofing Supplier Example 2 MONTH PRODUCTION DAYS PRODUCTION AT 50 UNITS PER DAY Jan 22 1,100 900 +200 200 Feb 18 900 700 +200 400 Mar 21 1,050 800 +250 650 Apr 21 1,050 1,200 –150 500 May 22 1,100 1,500 –400 100 June 20 1,000 1,100 –100 0 DEMAND FORECAST MONTHLY INVENTORY CHANGE ENDING INVENTORY 1,850 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 13 – 37 Roofing Supplier Example 2 COST MONTH Inventory Jan PRODUCTION DAYS carrying 22 Feb 18 Mar 21 Apr 21 Regular-time labor Other costs (overtime, May 22 hiring, layoffs, June 20 subcontracting) Total cost PRODUCTION MONTHLY CALCULATIONS AT 50 UNITS DEMAND INVENTORY ENDING PER\$9,250 F(= 1,850 units carried x \$5 per DAY ORECAST CHANGE INVENTORY 1,100 900 unit) +200 200 900 700 +200 400 1,050 1,200 –150 500 1,100 1,500 –400 100 1,000 1,100 –100 0 99,200 (= 10 workers x \$80 per day x 1,050 800 650 124 days) +250 0 \$108,450 1,850 Total units of inventory carried over from one month to the next = 1,850 units Wor...
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