3325p11h13aggregate planning

Units per day x 124 days 4712 units subcontract units

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Unformatted text preview: kforce required to produce 50 units per day = 10 workers 13 – 38 Roofing Supplier Example 3 In-house production = 38 units per day x 124 days = 4,712 units Subcontract units = 6,200 – 4,712 = 1,488 units COST Regular-time labor Subcontracting Total cost CALCULATIONS $75,392 (= 7.6 workers x $80 per day x 124 days) 29,760 (= 1,488 units x $20 per unit) $105,152 13 – 39 Production rate per working day Roofing Supplier Example 3 Forecast demand 70 – 60 – Level production using lowest monthly forecast demand 50 – 40 – 30 – Jan 22 0– Feb Mar Apr 18 21 21 May June 22 20 = Month = Number of working days 13 – 40 Roofing Supplier Example 4 Cost Computations for Plan 3 BASIC PRODUCTION COST (DEMAND X 1.6 HRS/UNIT X $10/HR) EXTRA COST OF INCREASING PRODUCTION (HIRING COST) EXTRA COST OF DECREASING PRODUCTION (LAYOFF COST) MONTH FORECAST (UNITS) DAILY PROD RATE Jan 900 41 $ 14,400 — — Feb 700 39 11,200 — $1,200 (= 2 x $600) 12,400 Mar 800 38 12,800 — $600 (= 1 x $600) 13,400 Apr 1,200 57 19,200 $5,700 (= 19 x $300) — 24,900 May 1,500 68 24,000 $3,300 (= 11 x $300) — 24,300 June 1,100 55 17,600 — $7,800 (= 13 x $600) 25,400 $99,200 $9,000 $9,600 $117,800 TOTAL COST $ 14,400 13 – 41 Production rate per working day Roofing Supplier Example 4 Forecast demand and monthly production 70 – 60 – 50 – 40 – 30 – Jan 22 0– Feb Mar Apr 18 21 21 May June 22 20 = Month = Number of working days 13 – 42 Comparison of Three Plans Comparison of the Three Plans COST PLAN 1 PLAN 2 Inventory carrying $ 9,250 $ 0 Regular labor 99,200 75,392 Overtime labor 0 0 Hiring 0 0 Layoffs 0 0 Subcontracting 0 29,760 Total cost $108,450 $105,152 PLAN 3 $ 0 99,200 0 9,000 9,600 0 $117,800 Plan 2 is the lowest cost option 13 – 43 Mathematical Approaches ▶ Useful for generating strategies ▶ Transportation Method of Linear Programming ▶Produces an optimal plan ▶Works well for inventories, overtime, subcontracting ▶Does not work when nonlinear or negative factors are Does introduced introduced ▶ Other Models ▶ General form of linear programming ▶ Simulation 13 – 44 Transportation Method Farnsworth’s Production, Demand, Capacity, and Cost Data SALES PERIOD MAR. APR. MAY 800 1,000 750 Regular 700 700 700 Overtime 50 50 50 150 150 130 Demand Capacity: Subcontracting Beginning inventory 100 tires COSTS Regular time $40 per tire Overtime $50 per tire Subcontracting $70 per tire Carrying...
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This document was uploaded on 02/19/2014.

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