Plan production for a four-month period: February through May. For February and
ID: 459357 • Letter: P
Question
Plan production for a four-month period: February through May. For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers needed for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are 100 workers on January 31. You are given the following demand forecast: February, 83,200; March, 64,000; April, 100,200; May, 40,200. Productivity is four units per worker hour, eight hours per day, 20 days per month. Assume zero inventory on February 1. Costs are hiring, $42 per new worker; layoff, $62 per worker laid off; inventory holding, $10 per unit-month; straight-time labor, $10 per hour; overtime, $15 per hour; backorder, $20 per unit. Find the total cost of this plan. (Negative values should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Round your answers to the nearest whole number.)Explanation / Answer
Labor productivity = 4*8*20 = 640 units per worker per month
Overtime constraint = 5000 hours * 4 units per hour = 20000 units
Aggregate Production Plan Hybrid Strategy Production/Inventory Planning Feb Mar Apr May Total Unit Total Productive days available per month 20 20 20 20 Units Cost ($) Cost ($) Demand 83,200 64,000 100,200 40,200 287,600 Net Cumulative Demand 83,200 147,200 247,400 287,600 Cumulative Production 83,200 147,200 223,600 287,600 Inventory (Excess Units) 0 0 0 0 0 10.0 0 Backorders (Units Short) 0 0 23,800 0 23,800 20.0 476,000 Capacity Planning Workers Hired 30 30 42 1,260 Workers Layed Off 30 30 62 1,860 Workforce Available 130 100 100 100 Labor Standard (units/worker/month) 640 640 640 640 640 Regular Production (units) 83,200 64,000 64,000 64,000 275,200 2.5 688,000 Overtime (units) 0 0 12,400 0 12,400 3.75 46,500 Total Production Capacity (units) 83,200 64,000 76,400 64,000 Overtime Capacity (Units) 0 0 20000 20000 Total Cost 1,213,620