Problem 2. DAT, Inc., needs to develop an aggregate plan for its product line. Relevant data are
Production time 1hr per unit
Average labor cost $10 per hour
Workweek 5 days a week
workhours 8 hours each day
Days per month 20 workdays per month (Assume)
Beginning Inventory 500 units
Safty stock one-half month
shortage cost $20 per unit per month
Carrying cost $5 per unit per month
# of workers 21
the forecast for next year is
Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec.
Forecast 2500 3000 4000 3500 3500 3000 3000 4000 4000 4000 3000 3000
Management prefers to keep a constant workforce and production level, absorbing variation in demand throuigh inventory excesses and shortages. Demand not met is carried over to the following month.
Develop an aggregate plan that will meet the demand and other conditions of the problem.
Forecast 2500 3000 4000 3500 3500 3000 3000 4000 4000 4000 3000 3000
Beginning inventory 500 1360
Production plan (20days*8hrs*21workers) 3360 3360 3360 3360 3360 3360 3360 3360 3360 3360 3360 3360
Ending inventory 1360
Safety stock 1250
Excess inventory 110
Back order 0
Cost
Production cost $33,600 $33,600 $33,600 $33,600 $33,600 $33,600 $33,600 $33,600 $33,600 $33,600 $33,600 $33,600
Inventory holding cost $550
Shortage Cost $0
total (Month) $ 34,150 $ 33,600 $ 33,600 $ 33,600 $ 33,600 $ 33,600 $ 33,600 $ 33,600 $ 33,600 $ 33,600 $ 33,600 $ 33,600
total (Year) $ 403,750
Forecast 2500 3000 4000 3500 3500 3000 3000 4000 4000 4000 3000 3000
Beginning inventory 500
Production plan (20days*8hrs*21workers) 3360 3360 3360 3360 3360 3360 3360 3360 3360 3360 3360 3360
Ending inventory 1360
Safety stock 1250
Excess inventory 110
Back order 0
Cost
Production cost $33,600 $33,600 $33,600 $33,600 $33,600 $33,600 $33,600 $33,600 $33,600 $33,600 $33,600 $33,600
Inventory holding cost $550
Shortage Cost $0
total (Month) $ 34,150 $ 33,600 $ 33,600 $ 33,600 $ 33,600 $ 33,600 $ 33,600 $ 33,600 $ 33,600 $ 33,600 $ 33,600 $ 33,600
total (Year) $ 403,750
