Question

Suppose you wish to set up a production plan for the CA&J Company for the next six months. You are given the following information: JAN FEB MAR APR MAY JUN Total Demand Forecast 1,800 1,500 1,100 900 1,100 1,600 8,000 Working Days 22 19 21 21 22 20 125 Production costs don’t change over the planning horizon and thus are ignored. A unit produced is but not sold in the month is counted as inventory for the entire month (end of month inventory) and its holding cost $1.5 per unit per month. At the beginning of each month new workers can be hired at a cost of $200 per worker. Existing workers can be laid off at a cost of $250 per worker. There are currently 15 workers at CA&J. For each worker, company is paying $100 per day. The company expects to have 400 units at the beginning of month 1. Because the demand forecast is imperfect, the CA&J Company wants to maintain a minimum safety stock of (buffer inventory) of 200 units for first three months and 100 units for the last three months to reduce the likelihood of stockouts. The company also want to wants to have 200 units of on-hand inventory at the end of month six. In the past, CA&J observed that over 20 working days with the workforce of level constant at 15 workers, the firm produced 2100 units. 1- Suppose CA&J uses Chase Strategy to satisfy the demand. Determine the number of workers the company would hire or fire in each month (15 points) 2- Determine ending inventory for each month (10 points) 3- What is the total cost of the plan? (10 points) 4- Fill in the similar table given to you in the class. (20 points) 5- Fill in the same table if we want to pursue constant workforce strategy. (20 Points) 6- Determine the ending inventory for each month. (15 Points) 7- What is the total cost of the plan? (10 Points) 8- Comment on the results. (Bonus: 5 Points)

          Suppose you wish to set up a production plan for the CA&J Company for the next six months. You are given the following information:

JAN FEB MAR APR MAY JUN Total
Demand Forecast 1,800 1,500 1,100 900 1,100 1,600 8,000
Working Days 22 19 21 21 22 20 125

Production costs don’t change over the planning horizon and thus are ignored. A unit produced is but not sold in the month is counted as inventory for the entire month (end of month inventory) and its holding cost $1.5 per unit per month. At the beginning of each month new workers can be hired at a cost of $200 per worker. Existing workers can be laid off at a cost of $250 per worker. There are currently 15 workers at CA&J. For each worker, company is paying $100 per day.

The company expects to have 400 units at the beginning of month 1. Because the demand forecast is imperfect, the CA&J Company wants to maintain a minimum safety stock of (buffer inventory) of 200 units for first three months and 100 units for the last three months to reduce the likelihood of stockouts.

The company also want to wants to have 200 units of on-hand inventory at the end of month six.

In the past, CA&J observed that over 20 working days with the workforce of level constant at 15 workers, the firm produced 2100 units.

1- Suppose CA&J uses Chase Strategy to satisfy the demand. Determine the number of workers the company would hire or fire in each month (15 points)
2- Determine ending inventory for each month (10 points)
3- What is the total cost of the plan? (10 points)
4- Fill in the similar table given to you in the class. (20 points)
5- Fill in the same table if we want to pursue constant workforce strategy. (20 Points)
6- Determine the ending inventory for each month. (15 Points)
7- What is the total cost of the plan? (10 Points)
8- Comment on the results. (Bonus: 5 Points)

Suppose you wish to set up a production plan for the CA J Company for the next six months. You are given the following information:

JAN FEB MAR APR MAY JUN Total
Demand Forecast 1,800 1,500 1,100 900 1,100 1,600 8,000
Working Days 22 19 21 21 22 20 125

Production costs don’t change over the planning horizon and thus are ignored. A unit produced is but not sold in the month is counted as inventory for the entire month (end of month inventory) and its holding cost 1.5 per unit per month. At the beginning of each month new workers can be hired at a cost of200 per worker. Existing workers can be laid off at a cost of 250 per worker. There are currently 15 workers at CA J. For each worker, company is paying100 per day.

The company expects to have 400 units at the beginning of month 1. Because the demand forecast is imperfect, the CA J Company wants to maintain a minimum safety stock of (buffer inventory) of 200 units for first three months and 100 units for the last three months to reduce the likelihood of stockouts.

The company also want to wants to have 200 units of on-hand inventory at the end of month six.

In the past, CA J observed that over 20 working days with the workforce of level constant at 15 workers, the firm produced 2100 units.

1- Suppose CA J uses Chase Strategy to satisfy the demand. Determine the number of workers the company would hire or fire in each month (15 points)
2- Determine ending inventory for each month (10 points)
3- What is the total cost of the plan? (10 points)
4- Fill in the similar table given to you in the class. (20 points)
5- Fill in the same table if we want to pursue constant workforce strategy. (20 Points)
6- Determine the ending inventory for each month. (15 Points)
7- What is the total cost of the plan? (10 Points)
8- Comment on the results. (Bonus: 5 Points)

Added by Amanda P.

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