Aggregate planning chase method and constant labor

PH GradeAssist 2 - MANG 6476 - Spring 2006 OL




Assignment Worksheet
Online Homework System
4/11/06 - 11:27 PM


MANG 6476 - Spring 2006
Name: ____________________________ Class:
OL
Class #: ____________________________ Section #: ____________________________
Assignment 8: Aggregate
Instructor: Kevin Watson Assignment:
Planning




Question 1: (1 point)

Michael Carrigg, Inc., is a DVD manufacturer in need of an aggregate plan for July through
December. The company has gathered the following data:


Costs

Holding cost $11/DVD/month
Subcontracting $70/DVD
Regular-time labor$10/hour
Overtime labor $15/hour for hours above
8 hours/worker/day
Hiring cost $45/worker
Layoff cost $95/worker


Demand

July 400
Aug.500
Sept.550
Oct. 700
Nov.800
Dec. 700


Other Data

Current workforce (June)8 people

http://phga.pearsoncmg.com/phga2/modules/unproctoredTest.Print (1 of 8)4/11/2006 10:27:50 PM
PH GradeAssist 2 - MANG 6476 - Spring 2006 OL

Labor-hours/DVD 4 hours
Workdays/month 20 days
Beginning inventory 150 DVDs
Ending inventory 0 DVDs


Note that the beginning inventory has a holding cost as it is carried into July.

(a) Vary the workforce so that production meets demand. Carrigg had eight workers on
board in June. What will the strategy cost?

Adjustments should be made for fractional workers. Therefore, if the capacity of a
fractional worker is needed, hire the full worker. Similarly, if a fraction of a worker is
excess then layoff the worker.

Do not use software such as POM for Windows. Compute the solution manually or by
using a spreadsheet.

$ ____________

Round your answer to the nearest whole number; for example, 123 .

(b) Vary overtime only and use a constant workforce of eight. What will the strategy cost?

Do not use software such as POM for Windows. Compute the solution manually or by
using a spreadsheet.

$ ____________

Round your answer to the nearest whole number; for example, 12,345 .




http://phga.pearsoncmg.com/phga2/modules/unproctoredTest.Print (2 of 8)4/11/2006 10:27:50 PM
PH GradeAssist 2 - MANG 6476 - Spring 2006 OL




Question 2: (1 point)
This question from the textbook has been modified for online
presentation.

Josie Gall's firm has developed the following supply, demand, cost, and inventory data. Allocate
production capacity to meet demand at a minimum cost using the transportation method.

Assume that the initial inventory of 20 units has no cost in the first period.

What is the optimal cost?

Supply Available

Demand
Period Regular OvertimeSubcontractForecast
Time

1 40 10 5 40
2 35 12 5 50
3 30 10 5 40


Initial inventory 20 units
Regular-time cost per unit $100
Overtime cost per unit $150
Subcontract cost per unit $200
Carrying cost per unit per month $4



Total optimal cost = $ ____________

Round your answer to the nearest whole number; for example, 12,345 .




http://phga.pearsoncmg.com/phga2/modules/unproctoredTest.Print (3 of 8)4/11/2006 10:27:50 PM
PH GradeAssist 2 - MANG 6476 - Spring 2006 OL




Question 3: (1 point)

The production planning period for flat-screen monitors at Georgia's Fernandez Electronics, Inc., is
4 months. Cost data are as follows:


Regular-time cost per monitor $ 70
Overtime cost per monitor $110
Subcontract cost per monitor $120
Carrying cost per monitor per month$ 4


For each of the next 4 months, capacity and demand for flat-screen monitors are as follows:


Period

Month 1Month 2Month 3aMonth 4

Demand 2,000 2,500 1,500 2,100
Capacity
Regular time 1,500 1,600 750 1,600
Overtime 400 400 200 400
Subcontract 600 600 600 600

a Factory closes for 2 weeks of vacation.


Fernandez Electronics expects to enter the planning period with 500 monitors in stock. Back
ordering is not permitted (meaning, for example, that monitors produced in the second month

http://phga.pearsoncmg.com/phga2/modules/unproctoredTest.Print (4 of 8)4/11/2006 10:27:50 PM
PH GradeAssist 2 - MANG 6476 - Spring 2006 OL

cannot be used in the first month). Develop a production plan that minimizes costs using the
transportation method.

What is the total cost of the Minimum Plan?

____________

Round your answer to the nearest whole number; for example, 123,456.




Question 4: (1 point)
This question from the textbook has been modified for online presentation. Parts A, C, and D have
been eliminated.

Lon Min has developed a specialized airtight vacuum bag to extend the freshness of seafood
shipped to restaurants. He has put together the following demand cost data:


ForecastRegularOver- Sub-
Quarter (Units) time time contract

1 500 400 80 100
2 750 400 80 100
3 910 800 160 100
4 450 400 80 100


Initial inventory = 250 units

Regular time cost = $1.00/unit



http://phga.pearsoncmg.com/phga2/modules/unproctoredTest.Print (5 of 8)4/11/2006 10:27:50 PM
PH GradeAssist 2 - MANG 6476 - Spring 2006 OL

Overtime cost = $1.50/unit

Subcontracting cost = $2.00/unit

Carrying cost = $0.20/unit/quarter

Back-order cost = $0.50/unit/quarter

Assume that any inventory has a carrying cost, including the initial inventory in quarter 1.

What is the cost of the plan?

$ ____________

Round your answer to the nearest whole number; for example, 1234 .




Question 5: (1 point)

Chris Fisher, owner of an Ohio firm that manufactures display cabinets, develops an 8-month
aggregate plan. Demand and capacity (in units) are forecast as follows:


Capacity
Source (units)Jan.Feb.Mar.Apr.MayJuneJulyAug.

Regular time 235 255 290 300 300 290 300 290
Overtime 20 24 26 24 30 28 30 30
Subcontract 12 16 15 17 17 19 19 20
Demand 255 294 321 301 330 320 345 340



http://phga.pearsoncmg.com/phga2/modules/unproctoredTest.Print (6 of 8)4/11/2006 10:27:50 PM
PH GradeAssist 2 - MANG 6476 - Spring 2006 OL

The cost of producing each unit is $1,000 on regular time, $1,300 on overtime, and $1,800 on
subcontract. Inventory carrying cost is $200 per unit per month. There is no beginning or
ending inventory in stock and no back orders are permitted from period to period.

(a) Set up a production plan that minimizes cost by producing exactly what the demand is
each month. Let the workforce vary by using regular time first, then overtime, and then
subcontracting. What is this plan's cost?

$____________

Round your answer to the nearest whole number; for example, 1,234,567.

(b) Through better planning, regular-time production can be set at exactly the same
amount, 275 units, per month.

What is this plan's cost?

$____________

Round your answer to the nearest whole number; for example, 1,234,567.

(c) If overtime costs rise from $1,300 to $1,400, what is the cost of the plan in part (a)?

$____________

Round your answer to the nearest whole number; for example, 1,234,567.

What is the cost if overtime costs fall to $1,200?

$____________

Round your answer to the nearest whole number; for example, 1,234,567.




http://phga.pearsoncmg.com/phga2/modules/unproctoredTest.Print (7 of 8)4/11/2006 10:27:50 PM
PH GradeAssist 2 - MANG 6476 - Spring 2006 OL




http://phga.pearsoncmg.com/phga2/modules/unproctoredTest.Print (8 of 8)4/11/2006 10:27:50 PM