Adidas produces shoes for sale at Macys, JC Penny and Footlocker. The company makes a few different design of shoes from high-end to low end. The manager, Eric, is interested in using a Level Aggregate Plan for production. Inventories and back orders will be used to handle demand fluctuation. As an Operations Manager, you have been asked to develop an Aggregate Plan. Use the data provided below to answer this questions. Cost Data Regular-time labor cost (hrs) 11 Overtime labor cost (hrs) 18 Subcontracting cost per unit (labor only) 84 Holding cost per unit per period 12 Back-order cost per unit per employee 21 Hiring cost per employees 600 Firing cost per employees 450 Capacity Data Beginning workforce (employees) 215 Beginning inventory in units 2000 Labor standard per units in hrs 6 Regular time available per period (hrs) 160 Overtime available per period (hrs) 32 Subcontracting maximum per period in units 1000 Subcontracting minimum per period in units 500 Demand Data Schedule Period 1 5000 Schedule Period 2 4800 Schedule Period 3 7800 Schedule Period 4 5200 Schedule Period 5 6560 Schedule Period 6 3600 Schedule Period 7 6000 Schedule Period 8 5296 Schedule Period 9 2114 Schedule Period 10 2114 Find: Total aggregate demand Aggregate Production Rate The workforce for aggregate production rate

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter22: Getting Divisions To Work In The Firm’s Best Interests

Section: Chapter Questions

Problem 22.5IP: Furniture Forecasting Futura Furniture Products manufactures upscale office furniture for the Office...

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Adidas produces shoes for sale at Macys, JC Penny and Footlocker. The company makes a few different design of shoes from high-end to low end. The manager, Eric, is interested in using a Level Aggregate Plan for production. Inventories and back orders will be used to handle demand fluctuation. As an Operations Manager, you have been asked to develop an Aggregate Plan. Use the data provided below to answer this questions.

Cost Data

Regular-time labor cost (hrs)	11
Overtime labor cost (hrs)	18
Subcontracting cost per unit (labor only)	84
Holding cost per unit per period	12
Back-order cost per unit per employee	21
Hiring cost per employees	600
Firing cost per employees	450

Capacity Data

Beginning workforce (employees)	215
Beginning inventory in units	2000
Labor standard per units in hrs	6
Regular time available per period (hrs)	160
Overtime available per period (hrs)	32
Subcontracting maximum per period in units	1000
Subcontracting minimum per period in units	500

Demand Data

Schedule Period 1	5000
Schedule Period 2	4800
Schedule Period 3	7800
Schedule Period 4	5200
Schedule Period 5	6560
Schedule Period 6	3600
Schedule Period 7	6000
Schedule Period 8	5296
Schedule Period 9	2114
Schedule Period 10	2114

Find:

Total aggregate demand
Aggregate Production Rate
The workforce for aggregate production rate
Show what would happen if this plan were implemented.
The costs of this plan (regular time labor costs, holding costs, back order costs and total costs)
Evaluate the plan in terms of cost, customer service operations, and human resources.

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