Scribd
Upload
131 views2 pages

EXAMPL1 Eaggregate

This document summarizes two strategies - a "chase strategy" that varies workforce size to exactly meet monthly demand, and a "pure strategy" that maintains a constant workforce to meet average demand over six months. It provides a table comparing the projected production requirements, workforce levels, costs of regular production, hiring/firing, inventory carrying costs and stockouts for each strategy over the six month period.

Uploaded by

Aisel Piala
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
131 views2 pages

EXAMPL1 Eaggregate

This document summarizes two strategies - a "chase strategy" that varies workforce size to exactly meet monthly demand, and a "pure strategy" that maintains a constant workforce to meet average demand over six months. It provides a table comparing the projected production requirements, workforce levels, costs of regular production, hiring/firing, inventory carrying costs and stockouts for each strategy over the six month period.

Uploaded by

Aisel Piala
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

EXAMPLE

JAN FEB MAR APR MAY JUNE TOTAL


Demand 2,200 1,500 1,100 900 1,100 1,600 8,400
forecast
(Units)
Working 22 19 21 21 22 20 125
days
(per
month)

COSTS
Material Cost $ 100/unit
Inventory Holding cost $ 1.50/unit-month
Stockout Cost $ 5/unit/month
Subcontracting Cost $ 125/unit
Hiring and training cost $ 200/worker
Layoff cost $ 250/worker
Labor required per unit 5 hours
Labor cost (first 8 hours each day) $ 4/hour
Overtime cost (time and a half) $ 6/hour

INVENTORY & WORK FORCE

Beginning Inventory 400 units


Number of workers currently employed 30
===============================================================

STRATEGIES:

1. Produce to exact monthly production requirements using a regular eight-hour day by


varying workforce size. (chase strategy)
2. Produce to meet expected average demand over the next six months by maintaining a
constant workforce.
E.g.;
(8,400-400) units x 5hours per unit / (125 days X 8 hours per day) = 40 workers

3. Produce to meet the minimum amount expected demand (April) using a constant
workforce on regular time. Subcontract to meet additional output requirements.
E.g.;
900 units x 6 months x 5 hours per unit) / (125 days x 8 hours per day) = 27 workers
SOLUTION
1. Chase strategy

JAN FEB MAR APR MAY JUNE TOTAL


Demand 2,200 1,500 1,100 900 1,100 1,600 8,400
forecast
Initial 400
Inventory
Production 1,800 1,500 1,100 900 1,100 1,600 8,000
Requirements
Aggregate
Plan:
Workers 51 49 33 27 31 50
required
Workers hired 21 0 0 0 4 19
Workers fired 0 2 16 6 0 0
Units produced 1,800 1,500 1,100 900 1,100 1,600 8,000
Costs-full:
Regular 36,000 30,000 22,000 18,000 22,000 32,000 160,000
production
Material costs 180,000 150,000 110,000 90,000 110,000 160,000 800,000
Hiring costs 4,200 0 0 0 800 3,800 8,800
Firing Costs 0 500 4,000 1,500 0 0 6,000
Total Full 220,200 180,500 136,000 109,500 132,800 195,800 974,800
Costs

2. Pure Strategy

JAN FEB MAR APR MAY JUNE TOTAL


Demand 2,200 1,500 1,100 900 1,100 1,600 8,400
forecast
Initial 400
Inventory
Production 1,800 1,500 1,100 900 1,100 1,600 8,000
Requirements
Aggregate
Plan:
Workers 40 40 40 40 40 40
required
Workers hired 10 0 0 0 0 0
Workers fired 0 0 0 0 0 0
Units produced 1,408 1,216 1,344 1,344 1,408 1,280 8,000
Monthly (392) (284) 244 444 308 (320)
Inventory
Cumulative (392) (676) (432) 12 320 0
Inventory
Costs-full:
Regular 28,160 24,320 26,880 26,880 28,160 25,600 160,000
production
Material costs 140,800 121,600 134,400 134,400 140,800 128,000 800,000
Hiring costs 2,000 0 0 0 0 0 2,000
Firing Costs 0 0 0 0 0 0 0
Invt’y Carrying 0 0 0 18 480 0 498
Costs
Stock out Costs 1,960 3,380 2,160 0 0 0 7,500
Total Full 969,998
Costs

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy