Project #76683 - Aggregate

Currently the plant is running 10 lines with no overtime. Each line requires six people to run. For planning purposes, the lines are run for 7.5 hours each normal shift. Employees, though, are paid for 8 hours of work. It is possible to run up to 2 hours of overtime each day, but it must be scheduled for a week at a time, and all the lines must run overtime when it is scheduled. Workers are paid $20.00/hour during a regular shift and $30.00/hour on over-time. The standard production rate for each line is 450 cases/hour.2 The marketing forecast for demand is as follows: Q1 -2,000; Q2 -2,200; Q3-2,500; Q4-2,650; and Q1 (next year) 2,200. These numbers are in 1,000-case units. Each number represents a 13-week forecast.3 Management has instructed manufacturing to main-tain a two-week supply of pudding inventory in the warehouses. The two-week supply should be based on future expected sales. The following are ending inventory target levels for each quarter: Q1 338; Q2 385; Q3 408; Q4 338.4 Inventory carrying cost is estimated by accounting to be $1.00 per case per year. This means case of pudding is held in inventory for an entire year, the cost to just carry that case in inventory is $1.00. If a case is carried for only one week, the cost is $1.00/52, or $.01923. The cost is proportional to the time carried in inventory. There are 200,000 cases in inventory at the be-ginning of Q1 (this is 200 cases in the 1,000-case units that the forecast is given in).5 If a stockout occurs, the item is backordered and shipped at a later date. The cost when a backorder occurs is $2.40 per case due to the loss of goodwill and the high cost of emergency shipping.6 The human resource group estimates that it costs $5,000 to hire and train a new production employee. It costs $3,000 to lay off a production worker.7 Make the following assumptions: • Inventory costs are based on inventory in excess of safety stock.• Backorder costs are incurred on negative de-viation from planned safety stock, even though planned inventory may be positive.¢ Overtime must be used over an entire quarter and <br />should be based on hours per day over that time.  Questions  1 Prepare an aggregate plan for the coming year, as-suming that the sales forecast is perfect. Use the spreadsheet “Bradford Manufacturing.â€Â In the spreadsheet an area has been designated for your ag-gregate plan solution. Supply the number of packag-ing lines to run and the number of overtime hours for each quarter. You will need to set up the cost calcula-tions in the spreadsheet.You may want to try using the Excel Solver to ‚nd a solution. Remember that your final solution needs an integer number of lines and an integer num-ber of overtime hours for each quarter. (Solutions that require 8.9134 lines and 1.256 hours of overtime are not feasible.)2 Review your solution carefully and be prepared to defend it.

Subject Business
Due By (Pacific Time) 07/17/2015 01:00 am
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