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Planning

In: Business and Management

Submitted By likhon
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Minimum workforce with sub contracting strategy (solution of problem 1) | Jan | Feb | Mar | Apr | May | June | Total | Demand forecast (units) | 2200 | 1500 | 1100 | 900 | 1100 | 1600 | 8400 | Initial inventory | 400 | | | | | | | Production requirement | 1800 | 1500 | 1100 | 900 | 1100 | 1600 | 8000 | Working days (per month) | 22 | 19 | 21 | 21 | 22 | 20 | 125 | Total hours required to meet monthly demand | 1800 x 5 = 9000 | 1500 x 5 = 7500 | 1100 x 5 = 5500 | 900 x 5 = 4500 | 1100 x 5 = 5500 | 1600 x 5 = 8000 | | Hours produces by an operator per month | 22 x 8 = 176 | 19 x 8 = 152 | 21 x 8 = 168 | 21 x 8 = 168 | 22 x 8 = 176 | 20 x 8 = 160 | | Workers required per month | 9000 / 176 = 51 | 7500 / 152 = 49 | 5500 / 168 = 33 | 4500 / 168 = 27 | 5500 / 176 = 31 | 8000 / 160 = 50 | | Aggregate planning | Workers used | 27 | 27 | 27 | 27 | 27 | 27 | | Workers hired | 0 | 0 | 0 | 0 | 0 | 0 | | Workers fired | 3 | 0 | 0 | 0 | 0 | 0 | | Units produced | 27*22*8 /5 = 950 | 27*19*8 /5 = 821 | 27*21*8 /5 = 907 | 27*21*8 /5 = 907 | 27*22*8 /5 = 950 | 27*20*8 /5 = 864 | | Monthly inventory | 0 | 0 | 0 | 7 | 0 | 0 | | Units subcontracted | 1800 – 950 =850 | 1500 – 821= 679 | 1100-907 =193 | 0 | 1100-957 =143 | 1600-864=736 | 2601 | Full cost | Labor cost | 27*22*8*$4 =19000 | 27*19*8*$4 =16420 | 27*21*8*$4 =18140 | 27*21*8*$4 =18140 | 27*22*8*$4 =19000 | 27*20*8*$4 =17280 | 107980 | Material costs | 95000 | 82100 | 90700 | 90700 | 95000 | 86400 | 539900 | Hiring cost | 0 | 0 | 0 | 0 | 0 | 0 | 0 | Firing cost | 3 x $250 = 750 | 0 | 0 | 0 | 0 | 0 | 750 | Inventory carrying cost | 0 | 0 | 0 | 11 | 0 | 0 | 11 | Sub contracting cost | 106250 | 84875 | 24125 | 0 | 17875 | 92000 | 325125 | Total cost | 221000 | 183395 | 132965 | 108851 | 131875 | 195680 | 973766 |

Minimum workforce with sub contracting strategy...

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