Inventory costper manhour quarter firing in any

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Tradeoff between Firing vs. Inventory: (Cost/Per Manhour-Quarter) Firing in Any Quarter: = $2,000/480 = $4.16 Keep Inventory: For 1 Quarter: $0.15 For 2 Quarter: $0.30 For 3 Quarter: $0.45 For 4 Quarter: $0.60 ----------------------------------------- ----------------------------------------- For 20 Quarter: $3.00 For 28 Quarter: $4.20 > ($4.16) So: When demand decreases, we prefer to use Inventory over Firing, unless we must keep Inventory for a very long period (28 Quarters – 7 Years).
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Aggregate Production Plan Sheet Plan:3 Policy: Mixed with Hiring/Firing & Overtime (in 1,000 units) Quarter 1 2 3 4 Total Beginning Inventory 25 Regular Production 96 Overtime Production Forecasted Demand 100 80 140 120 Labor-hours Hired Labor-hours Fired Safety Stock 12 12 12 12 Ending Inventory Total Production Cost: = $4X432,000+(24000/480)X1000+ 0.15X 92,000 = $1,791,800 0 0 0 21 37 17 17 92 21 96 0 0 37 120 24 17 120 0 0 432 24
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Aggregate Production Plan Sheet Plan:4 Policy: Mixed (in 1,000 units) Quarter 1 2 3 4 Total Beginning Inventory 25 Regular Production Overtime Production Forecasted Demand 100 80 140 120 Labor-hours Hired Labor-hours Fired Safety Stock 12 12 12 12 Ending Inventory Total Production Cost: $4X432,000 + (12,000/480) X $1,000 + $0.15X140,000 = $1,774,000 33 61 29 108 108 108 108 432 0 0 0 0 0 12 0 0 0 12 0 0 0 0 0 33 61 29 17 140
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Master Production Scheduling
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Master Production Schedule for Products X, Y, Z 1 2 3 4 5 6 7 8 9 10 Product X 200 400 200 100 900 Product Y 100 100 15 0 100 30 0 Product Z 100 200 20 0 100
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Master Production Scheduling (MPS) MPS is a detailed production schedule for end-products (or service), specified period with the exactly quantities Three major input to MPS 1. forecasts of end-product demand 2. actual orders received from customers 3. aggregate production planning (APP)
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Master Production Scheduling (MPS) (II) Objective of MPS: develop a Master production schedule for each end-product to meet the specified demand of each period under given production leadtime and capacity. Time fences: to reflect the scheduling flexibility: * frozen: 1st section in which all schedule are fixed * firm: 2nd where schedules can be changed if needed * full: 3rd with full capacity scheduled but changes is ok * Open section: last few periods, capacity available for new orders
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Where Planning and Scheduling Meet? Planning Scheduling Planning Bill of Materials Aggregates: product and resource families Forecast and order balancing Resource characteristics Machine setup characteristics Detailed routings/ operations Finite Constraint Model And Engine Advanced planning and scheduling share a common core, but each has its own set of functions that others does not fulfill
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Product structure Production planning Capacity planning 1.Product group Aggregate production planning Resource requirement planning 2. End products Master production scheduling Rough-cut capacity planning 3. component Material requirement planning Capacity requirement planning
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Product Structure, Production Planning and Capacity Planning Development of MPS: 1. Select MPS items 2. Determine MPS planning horizon 3. Develop an initial schedule 4. Rough-cut capacity analysis
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Overall View of the Inputs to a Standard Material Requirements Planning Program and the reports Generated by the Program Aggregate Production Plan Material Planning (MRP computer program) Master Production Schedule (MPS) Firm Orders
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