Principles Of Operations Management
11th Edition
ISBN: 9780135173930
Author: RENDER, Barry, HEIZER, Jay, Munson, Chuck
Publisher: Pearson,
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 13, Problem 2P
a)
Summary Introduction
To determine: The preferable plan using aggregate planning.
b)
Summary Introduction
To determine: Plan 6 to maintain the constant workforce and use the subcontract to meet the demand requirement.
c)
Summary Introduction
To summarize: The results from Plan 1 to Plan 6.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
5. Formulate a level sales and operations plan for a company with the following
predicted demand:
Month
Demand
6,300
2
9,000
3
6,000
4
9,000
5
15,000
6
6,000
Total
51,300
The beginning workforce is 125 employees. The monthly output per employee is
150 units. The costs to hire and lay off a worker are $2,500 and $4,000, respectively.
The cost to carry an item in inventory for one month is estimated at $10, and the
stockout cost is $25 per unit. Show the production schedule, the inventory levels,
and the changes in workforce from period to period. Compute the plan's cost.
Deforrest Marine Motors manufactures engines for the speedboat racing circuit. As part of their annual planning cycle, they forecasted
demand for the next four quarters. The number of available days of production and the anticipated demand are given below.
Employees
Production Rate
Production Cost
Backorder Cost
Overtime Cost
Overtime Limit
Demand
Q1
2,400
6,019,000
They also estimated many of the costs required to conduct operations planning. Some of these key figures are listed below.
30
70 units/employee/quarter
Q2
2,200
$1,000/unit
$200/unit/quarter
$1,500/unit
<= 25% of Reg. Production
Q3
1,700
Q4
1,800
Hire Cost
Fire Cost
Subcontracting Cost
Subcontracting Limit
Inventory Cost
Initial Inventory
$1,200/employee
$800/employee
$1,800/unit
400 units maximum
$100/unit/quarter
280 units
Deforrest Marine Motors wishes to maintain the current number of employees for the entire year to follow a level strategy balanced with
inventory and backorders as needed. What is the total cost of this…
The planner at a company that makes garden tractors is about to prepare an aggregate production plan that will cover the next 6 months. She has collected the following information:
Month
Demand Forecast Above the available capacity through permanent workforce
1
1,000
2
1,000
3
2,000
4
3,000
5
4,000
6
1,000
Total:
12,000
Production per month = 20 units per worker
Initial inventory = 500 units
Desired ending inventory (at the end of month 6) = 0 units
Cost:
Hire cost = $500 per temporary worker
Inventory = $10 per tractor per month
Backorder = $150 per tractor per month
The optimum aggregate plan is:
Month
1
2
3
4
5
6
Total
Forecast Demand above regular capacity
1,000
1,000
2,000
3,000
4,000
1,000
12,000
# of temporary workers required
50
50
100
150
200
50
Temp. Workers hired
25
25
50
75
0
0
Temp. workers laid off
0…
Chapter 13 Solutions
Principles Of Operations Management
Ch. 13 - Make the case for, and then against, this pricing...Ch. 13 - Prob. 1DQCh. 13 - Why are SOP teams typically cross-functional?Ch. 13 - Prob. 3DQCh. 13 - Prob. 4DQCh. 13 - Prob. 5DQCh. 13 - Prob. 6DQCh. 13 - Prob. 7DQCh. 13 - Prob. 8DQCh. 13 - Prob. 9DQ
Ch. 13 - Prob. 10DQCh. 13 - Prob. 11DQCh. 13 - Prob. 12DQCh. 13 - Prob. 13DQCh. 13 - Prob. 14DQCh. 13 - Prob. 1PCh. 13 - Prob. 2PCh. 13 - The president of Hill Enterprises, Terri Hill,...Ch. 13 - Prob. 4PCh. 13 - Prob. 5PCh. 13 - Prob. 6PCh. 13 - Consuelo Chua, Inc., is a disk drive manufacturer...Ch. 13 - Prob. 8PCh. 13 - Prob. 9PCh. 13 - Prob. 10PCh. 13 - Prob. 11PCh. 13 - Southeast Soda Pop, Inc., has a new fruit drink...Ch. 13 - Ram Roys firm has developed the following supply,...Ch. 13 - Jerusalem Medical Ltd., an Israeli producer of...Ch. 13 - Prob. 15PCh. 13 - Prob. 16PCh. 13 - Prob. 17PCh. 13 - Prob. 18PCh. 13 - Dwayne Cole, owner of a Florida firm that...Ch. 13 - Prob. 20PCh. 13 - Prob. 21PCh. 13 - Prob. 22PCh. 13 - Prob. 23PCh. 13 - Prob. 24PCh. 13 - Prob. 25PCh. 13 - Prob. 26PCh. 13 - Evaluate the various configurations of operating...Ch. 13 - Prob. 2CSCh. 13 - After researching revenue (yield) management in...Ch. 13 - The Magic used its original pricing systems of...Ch. 13 - Prob. 1.3VC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, operations-management and related others by exploring similar questions and additional content below.Similar questions
- Scenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. Is Ben Gibson acting legally? Is he acting ethically? Why or why not?arrow_forwardScenario 3 Ben Gibson, the purchasing manager at Coastal Products, was reviewing purchasing expenditures for packaging materials with Jeff Joyner. Ben was particularly disturbed about the amount spent on corrugated boxes purchased from Southeastern Corrugated. Ben said, I dont like the salesman from that company. He comes around here acting like he owns the place. He loves to tell us about his fancy car, house, and vacations. It seems to me he must be making too much money off of us! Jeff responded that he heard Southeastern Corrugated was going to ask for a price increase to cover the rising costs of raw material paper stock. Jeff further stated that Southeastern would probably ask for more than what was justified simply from rising paper stock costs. After the meeting, Ben decided he had heard enough. After all, he prided himself on being a results-oriented manager. There was no way he was going to allow that salesman to keep taking advantage of Coastal Products. Ben called Jeff and told him it was time to rebid the corrugated contract before Southeastern came in with a price increase request. Who did Jeff know that might be interested in the business? Jeff replied he had several companies in mind to include in the bidding process. These companies would surely come in at a lower price, partly because they used lower-grade boxes that would probably work well enough in Coastal Products process. Jeff also explained that these suppliers were not serious contenders for the business. Their purpose was to create competition with the bids. Ben told Jeff to make sure that Southeastern was well aware that these new suppliers were bidding on the contract. He also said to make sure the suppliers knew that price was going to be the determining factor in this quote, because he considered corrugated boxes to be a standard industry item. As the Marketing Manager for Southeastern Corrugated, what would you do upon receiving the request for quotation from Coastal Products?arrow_forwardScenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. Ethical decisions that affect a buyers ethical perspective usually involve the organizational environment, cultural environment, personal environment, and industry environment. Analyze this scenario using these four variables.arrow_forward
- Scenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. What should Sharon do in this situation?arrow_forwardScenario 4 Sharon Gillespie, a new buyer at Visionex, Inc., was reviewing quotations for a tooling contract submitted by four suppliers. She was evaluating the quotes based on price, target quality levels, and delivery lead time promises. As she was working, her manager, Dave Cox, entered her office. He asked how everything was progressing and if she needed any help. She mentioned she was reviewing quotations from suppliers for a tooling contract. Dave asked who the interested suppliers were and if she had made a decision. Sharon indicated that one supplier, Apex, appeared to fit exactly the requirements Visionex had specified in the proposal. Dave told her to keep up the good work. Later that day Dave again visited Sharons office. He stated that he had done some research on the suppliers and felt that another supplier, Micron, appeared to have the best track record with Visionex. He pointed out that Sharons first choice was a new supplier to Visionex and there was some risk involved with that choice. Dave indicated that it would please him greatly if she selected Micron for the contract. The next day Sharon was having lunch with another buyer, Mark Smith. She mentioned the conversation with Dave and said she honestly felt that Apex was the best choice. When Mark asked Sharon who Dave preferred, she answered, Micron. At that point Mark rolled his eyes and shook his head. Sharon asked what the body language was all about. Mark replied, Look, I know youre new but you should know this. I heard last week that Daves brother-in-law is a new part owner of Micron. I was wondering how soon it would be before he started steering business to that company. He is not the straightest character. Sharon was shocked. After a few moments, she announced that her original choice was still the best selection. At that point Mark reminded Sharon that she was replacing a terminated buyer who did not go along with one of Daves previous preferred suppliers. What does the Institute of Supply Management code of ethics say about financial conflicts of interest?arrow_forward4.) After 10 years of production, the chemical manufacturing plant has become very successful. Because of its success, a great demand for products came as many consumers wanted the company to sell them their products. To meet the demand, three alternatives were considered. Work overtime to meet demands. Annual overtime expenses are $500,000. Expand the plant to accommodate more production. Fixed annual expenses are $2,500,000. Make a contract with another company to produce additional products at a rate of $1,000,000. The cost of manufacturing products from the three alternatives are $3500, $3000 and $3250 per unit respectively. The plant sells every unit made regardless of how they were made at $15,000 per unit. The expected demand for the product is 150 units with a probability of 50% 250 units with a probability of 35% 350 units with a probability of 7.5% 400 units with a probability of 5% 500 units with a probability of 2.5%arrow_forward
- Lot sizing A producer with one product faces the following forecasted demand for the next 10 weeks: week 1. 2. 3. 4. 5. 6. 7. 8. 9. 10 Requirement 30 12 72 11 24 42 35 30 75 68 Assume furthermore that the producer faces a Set-up cost (K) equal to 132 each time production takes place and storage costs (h) of 0.6 per unit per week. a) Find the cost of the two extreme strategies Lot - for - lot (produce exactly what is needed in each period) and Produce - once (produce everything needed in the first period).arrow_forwardProblem #3 – At Freeze Inc. the manufacturing of each air conditioning has a variable cost of $400 per unit and it takes place in a facility that has a monthly fixed cost of $200,000. A) If Freeze Inc. sells each unit at $1,200 how many units do they need to sell every month to break-even? B) What is the monthly revenue at the break-even point? C) What is the monthly variable cost at the break-even point?arrow_forwarda) For an upcoming red carpet evening, a company is selling tickets at $60 per person at a large theatre which has a capacity of 10,000 people. Each attendant is expected to buy $12 of food and merchandise at the film evening. The cost of providing the food and merchandise is estimated to be $5 per person. All other ancillary services will be provided by the theatre. Initial analysis indicates that the ancillary cost of providing food and merchandise, as well as the staff needed to handle ticket sales, may be described as a semi-variable cost. Data on these costs and tickets sold from three similar events held at the venue have been collected and are tabulated below: Tickets Sold Cost ($) 2100 6640 3824 11284 4650 13525 Use the high-low method to estimate the total cost function relating to these ancillary costs. b) The company will be renting the theatre which will host the upcoming red carpet evening. The budgeted fixed cost of both renting the theatre and paying the…arrow_forward
- please write an theoretical answer and justify every possible solution.Thanksarrow_forwardCarlos Cavalas, the manager of Echo Products’ Brazilian Division, is trying to set the production schedule for the last quarter of the year. The Brazilian Division had planned to sell 70,070 units during the year, but by September 30 only the following activity had been reported: Units Inventory, January 1 0 Production 71,100 Sales 63,700 Inventory, September 30 7,400 The division can rent warehouse space to store up to 30,500 units. The minimum inventory level that the division should carry is 2,800 units. Mr. Cavalas is aware that production must be at least 4,440 units per quarter in order to retain a nucleus of key employees. Maximum production capacity is 44,200 units per quarter. Demand has been soft, and the sales forecast for the last quarter is only 19,500 units. Due to the nature of the division’s operations, fixed manufacturing overhead is a major element of product cost. Required: 1a. Assume that the division is using variable costing. How many…arrow_forwardWormwood, Ltd., produces a variety of furniture products. The planning committee wants to prepare an aggregate plan for the next six months using the following information.Month1 2 3 4 5 6Demand 160 150 160 180 170 140CapacityRegular 150 150 150 150 160 160Overtime 10 10 0 10 10 10Cost Per UnitRegular time $50Overtime 75Subcontract 80Inventory holding, per month 4Subcontracting can handle a maximum of 10 units per month. Beginning inventory is zero.Develop a plan that minimizes total cost. No back orders are allowed. Regular capacity = Regularproduction.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
MarketingMarketingISBN:9780357033791Author:Pride, William MPublisher:South Western Educational Publishing
Purchasing and Supply Chain ManagementOperations ManagementISBN:9781285869681Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. PattersonPublisher:Cengage Learning
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,
Marketing
Marketing
ISBN:9780357033791
Author:Pride, William M
Publisher:South Western Educational Publishing
Purchasing and Supply Chain Management
Operations Management
ISBN:9781285869681
Author:Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:Cengage Learning