Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Identify the factors for which decision-makers must deal in aggregate planning.
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- Forecast Data is given within problem. Cost Data is attached Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the production planner, has assembled the following cost data and demand forecast: LOADING... Click the icon to view the demand forecast. LOADING... Click the icon to view the cost data. John's job is to develop an aggregate plan. The three initial options he wants to evaluate are: • Plan A: a strategy that hires and fires personnel as necessary to meet the forecast. • Plan B: a level strategy. • Plan C: a level strategy that produces 1,000 cases per quarter and meets the forecast demand with inventory and subcontracting. Part 2 a) Which strategy is the lowest-cost plan? Try hiring and layoffs (to meet the forecast) as necessary (enter your responses as whole numbers). Hiring and Layoff Plan Quarter Forecast Production Hire (Units) Layoff (Units)…arrow_forwardScenario 8.3- Mousetraps A company faces the aggregate planning problem shown in the table below. Cost of regular production is $15 per unit, the cost of producing the same unit on overtime is $22.50, the cost subcontracting is $27 per unit, and the cost of carrying a unit in inventory from one month to the next is $10. Forecast Beginning Inventory Regular Time Overtime Subcontracting Ending Inventory The labor contract at the plant prohibits both overtime and subcontracting output to exceed 250 units in any five-month window. The plant capacity is 20 units per day produced using two shifts and the plant runs seven days a week. By policy, management wants to avoid stockouts. August Which month has a positive ending inventory for the optimal aggregate plan for Scenario 8.3? September July 800 140 O October August September October November 650 450 550 900 Novemberarrow_forwardBelow is a decision table for Gregor's Tennis School. Director Gregor Anderson is considering expanding his school to accommodate the potential increased interest in youth tennis lessons, camps and teams. The decision table below describes his situation. Alternatives Add a new building Extend hours for existing building Do Nothing Answer Decision Table Step 1 of 3: What is the estimated payoff for adding a new building during moderate demand? $ High Demand 40,000 30,000 0 State of Nature Moderate Demand 5,000 4,700 0 Low Demand -45,000 -6,000 0 Tables Keypad Keyboard Shortcutsarrow_forward
- The Silver Star Bicycle Company will be manufacturing both men's and women's models of its Easy-Pedal 10-speed bicycles during the next two months. Management wants to develop a production schedule indicating how many bicycles of each model should be produced in each month. Current demand forecasts call for 150 men's and 125 women's models to be shipped during the first month and 200 men's and 150 women's models to be shipped during the second month. Additional data are shown: Production Labor Requirements (hours) Current Model Costs Manufacturing Assembly Inventory Men's $120 2.0 1.5 20 Women's $90 1.6 1.0 30 Last month the company used a total of 1000 hours of labor. The company's labor relations policy will not allow the combined total hours of labor (manufacturing plus assembly) to increase or decrease by more than 100 hours from month to month. In addition, the company charges monthly inventory at the rate of 2% of the production cost based on the inventory levels at the end of…arrow_forwardWhat are the different options available for management in aggregate planning to adjust supply? Explain any one of the options.arrow_forwardm1arrow_forward
- How does aggregate planning contribute to overall cost reduction and efficiency improvement?arrow_forwardw given info solve for all 4 quarters for production, hire, and layoffarrow_forwardAssume that Blue Button Manufacturing (BBM) has accepted the merits of aggregate planning. You have been requested to indicate the way forward and must recommend an aggregate planning strategy to the management team. Write a report in which you describe the concept “trade-offs in aggregate planning”, identify the potential strategies that could be followed, including the use case for each strategy, and then substantiate your choice of strategy for BBMarrow_forward
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