operations

Part A)

Given the projected demands for the next six months below, use the first editable worksheet to prepare a level workforce aggregate production plan that uses inventory, regular time, overtime, and backorders.  A maximum of 30 units per month of overtime production are allowed at a cost of $30 per unit.  Any units that must be backordered incur a cost of $40 each.  Inventory holding cost is $6 per unit, and regular time labor cost is $25 per unit produced.  An aggregate planning worksheet is provided for you if you choose to use it.  The current workforce level is not to be changed.  There are currently 70 employees on the payroll and each employee can produce 2 units per month in regular production time.  Hiring cost is $700 and layoff cost is $850.  Assume an employee hired must work the entire month.

                                                MONTH     FORECAST

                     =====     ========

                       1         180

                       2         170

                       3         140

                       4         175

                       5         130

                 6         150

Part B)

Use the second editable worksheet to prepare a second aggregate production plan using the same information as Part A but following a chase demand strategy adjusting the workforce size only.

Aggregate Planning Worksheet

                                                                                                                                         Total Cost: