Because of its labor contract a company must hire enough labor for 100units of p
ID: 416465 • Letter: B
Question
Because of its labor contract a company must hire enough labor for 100units of production per weck on one shift or 200 units per week on two shifts. They cannot hire layoff or work over time. During the fourth week workers will be available from another department to work part or all of an extra shift (up to 100 units). There is a planned shut down for maintenance in second week which will cut to half. Develop a production plan the open inventory is 200 units and desired ending inventory is 300 units. 2.13 Total production 300 +1080-200-1180 units Number of weeks available for production 5.5 (because week 2 is half week) Average weekly level production 1180/55-214.5 units week The nearest quantity that can be produced is 200 units on two shifts. In the second week there is a shutdown so production in that week will be only 100 units Total production so far 5 x 200+100 1100 units The balance of 80 units can be made in week four when extra helpis available. But when you make you have to make at least 100, so that week four's production will be 300. Therefore total production is Please filling in the table below) Week Forecast demand Planned Production Planned inventory 200 1 2345 6 Total 120 160 240 240 160 1080 Finally, the ending inventory will not be 300 units,why!Explanation / Answer
Total production required = Ending inventory + sum of forecast demand – Opening inventory = 300 + 1080 – 200 = 1180
Since week 2 is cut to half, total number of weeks available for production = 5.5 weeks
It is however mentioned that maximum available normal monthly production = 200
Thus, total normal production in 5.5 weeks = 200 x 5.5 = 1100 units
Thus , shortfall which needs to be catered from extra production during week 4 = 1180 – 1100 = 80 units
It is to be note that maximum “upto 100 units” can be produced in week 4 .
Since production requirement of 80 < Maximum additional production available of 100 units, it is a feasible plan
Thus Production plan would be as per following:
Week 1 = 200 units
Week 2 = 100 units
Week 3 = 200 Units
Week 4 = 200 + 80 = 280units
Week 5 = 200 units
Week 6 = 200 units
Week
1
2
3
4
5
6
Total
Forecast demand
120
160
240
240
160
160
1080
Planned production
200
100
200
280
200
200
1180
Planned inventory :200
280
220
180
220
260
300
Week
1
2
3
4
5
6
Total
Forecast demand
120
160
240
240
160
160
1080
Planned production
200
100
200
280
200
200
1180
Planned inventory :200
280
220
180
220
260
300