a)
To evaluate: Plan A and plan B.
Introduction: The aggregate plan is the output of sales and operations planning. The major concern of aggregate planning is the production time and quantity for the intermediate future. Aggregate planning would encompass a time prospect of approximately 3 to 18 months.
b)
To determine: The best plan between plan A and plan B
Introduction: The aggregate plan is the output of sales and operations planning. The major concern of aggregate planning is the production time and quantity for the intermediate future. Aggregate planning would encompass a time prospect of approximately 3 to 18 months.
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Chapter 13 Solutions
Mylab Operations Management With Pearson Etext -- Access Card -- For Operations Management: Sustainability And Supply Chain Management (13th Edition)
- Q7. The president of Rose Bowl Enterprises, Desmond Howard, projects the firms aggregate DEMAND requirements over the next 8 months as follows: These are the monthly DEMAND, not production. MONTH JAN FEB MAR APR MAY JUN JULY AUG DEMAND 1,400 1,600 1,800 1,800 2,200 2,200 1,800 1,800 PRODUCTION 1,600 from December INVENTORY 200 from Dec plus 200 His operations manager is considering a new plan, which begins in January with 200 units on hand. Stockout cost of lost sales is $100 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle time costs. The plan is called plan A. Plan A: Vary the workforce level to execute a strategy that produces the quantity demanded in the prior month. The December demand was given as 1,600 units per month. Therefore, the production for JAN will be 1,600. However, only 1,400 are needed. Therefore, the extra 200 produced go into inventory and there is a holding cost for inventory. Also, per the above, you already have 200 units in inventory…arrow_forwardQuestion 3 Regular output capacity is 130 units per month. Regular cost per unit = K600. Overtime cost per unit K900. Beginning inventory is 0 units. We have the forecast of engine demand shown below: a) Develop a chase plan that matches the forecast. Calculate the cost of the plan. b) Develop a level plan that uses inventory to absorb fluctuations. Compare the costs of the level plan to the costs of the chase plan from Part (a). Inventory carrying cost per unit per month = 20. Backlog cost per unit per month = K900. There should be no backlog in the final month. Month Forecast 1 120 2 3 135 140 4 120 End of assignment 1 5 125 6 125 7 140 = 8 135 Total 1,040arrow_forwardSubject: Logistic management Q): What are the ways to reduce inventory levels, explain with examples?arrow_forward
- Subject: Logistic management Q): calculate inventory turn over ratio, Where sales is 2,000,000COGS is 65% of sales And average inventory is 125,435 What will be inventory ratio in days and weeksarrow_forwardWhat is aggregate planning?arrow_forwardProblem 1 The following information applies to the City View Restaurant. May 1 Food inventory value: $73,480 bnl de May 31 Food inventory value: $77,550 bonen Cost of food used during May $386,410 1. What is the inventory turnover rate for food products for the City View Restaurant? 2. What does the answer (inventory turnover ratio) in question 1 mean?arrow_forward
- Aggregate Planning and S&OP Ch13 13.22 Uriel Southeastern Airlines's daily flight from Atlanta to Charlotte uses a Boeing 737, with all-coach seating for 120 people. In the past the airline has priced every seat at $140 for the one was fight. An average of 80 passengers are on each flight. The variable cost of a filled seat is $25. Katie Morgan, the new operations manager, has decided to try a yield revenue approach, with seats priced at $80 for early bookins and at $190 for bookings within 1 week of flight. She estimates that the airline will sell 65 seats at the lower prie and 35 at the higher price. Variable cost will not change. Which approach is preferabble for Ms. Morgan? Information All coach seating One price in past Average Variable cost Potential Changes Early booking Book within 1 week Variable cost stays $ $ $ $ 120 People 140.00 80 Seats booked 25.00 80.00 $190.00 25.00 Estimated seats: Estimated seats: 65 35arrow_forward3. Your independent oil and gas company is considering the purchase at time zero of a 100 % working interest in a property. If you elect to develop the lease for an 87.5% revenue interest, the following costs will be incurred: in time zero, the lease bonus cost is $100,00o, intangible drilling costs are estimated at $550,000 while tangible completion costs are estimated at $300,000. Operating costs are estimated to remain constant at $8.00 per barrel (includes production costs, severance taxes and ad-valorem taxes) in each of years 1, 2, 3 and 4. Oil prices are forecasted to be $50.00 per barrel in each of years 1, 2, 3, and 4. Production is summarized in the following table. The escalated dollar minimum rate of return is 12.0%. Use net present value analysis to determine if the acquisition and development of this lease is economically viable: (a) Before considering income taxes, (b) Assuming income tax rate of 30%. (Expense 100% of intangible drilling costs at the end of first year,…arrow_forwardQUESTION 3 A). Describe each of the three basic strategies used in developing a production plan. What are the advantages and disadvantages of each? B). A company wants to develop a level production plan for a family of products. The opening inventory is 100 units, and an increase to 150 units is expected by the end of the plan. The demand for each period is given in what follows. How much should the company produce each period? What will be the ending inventories in each period? All periods have the same number of working days. Period 1 3 4 6 Total Forecast Demand | 100| 120| 130| 140 | 120| 110 Planned Production Planned 100 Inventory C). For the following data, calculate the number of workers required for level production and the resulting month-end inventories. Each worker can produce 15 inventory is 9000 units. units per day, and the desired ending Month 1 2 3 4 Total Working Days 20 24 12 19 Forecast Demand 28,000 27,500 28,500 28,500 Planned Production Planned Inventory 11,250arrow_forward
- Q2) 3. What is long range plan?arrow_forwardQuestion 2 Rohe (Hong Kong) Ltd is a pharmaceutical company which manufactures and supplies various drugs for drug stores in Asia. Currently, Rohe (Hong Kong) Ltd has four factories A, B, C and D. Management has decided to build a new factory at a location central to these factories. Information regarding the yearly demands and the map coordinates for the four factories are shown in below table. Factories Demand - x-coord 9,000- 3,000- 5,000 y-coord 130 40 A Be 20 60 Ce 70 100 De 16,000- 90 30 (a) Determine the map coordinates of the new factory. (b) Suggest and elaborate TWO other factors that need to consider in the selection of location. «arrow_forwardQuestion 5: A Mechanical Design Company produces an innovative design of Batttery used for electric cars. The standard design of producing one(1) unit of Battery is provided in the bill of materials BOM which requires material mix shown in Table Q5a. The current monthly production of Battery is 2000 units per month with the actual material consumption shown in Table Q5b. Determine the following and justify why it is favorable or adverse. (i) Material usage variance; (ii) Material price variance; (ii) Total material cost variance; Table Q5a Usage (units) 5 Materials Total cost (OMR) V 17 W 3 38 X 8 50 Y 38 Table Q5b Usage (units) 12,047 6,902 17,556 4,122 Total cost (OMR) 50,526 94,083 103,953 76,408 Materials V W Yarrow_forward
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