210 CHAPTER 13 AG G R E G A T E PL A N N I N G AND S &OP
Plan B: Level Strategy of 1,350 cases
Quarter 1
0
450
50
Quarter 2
0
200
Quarter 3
0
450
Quarter 4
900
0
0
Total
5,400
5,400
0
1,100
0
Cost
$162,000
$165,000
$2,000
Total Cost: $329,000
Period
Production
Holding
Quarter 1
Quarter 2
Quarter 3
Quarter 4
300
Total
5,400
4,800
400
0
(b) The boss implements Plan C because it is not only the
lowest cost, but has the added advantage of providing
steady employment for the employees after the initial
13.13 Assuming that back orders are not permitted, the solution is:
Reg. Time
Hiring
Period
Forecast
Production
Inventory
Holding
Shortage
Change
(Increase)
Cost
$144,000
$0
$54,000
$16,000
$0
$8,000
Total Cost: $222,000
Total cost = $11,790
Copyright ©2017 Pearson Education, Inc.
Copyright ©2017 Pearson Education, Inc.
Total cost = $100,750
Copyright ©2017 Pearson Education, Inc.
13.19
Init
0
Jan
255
235
20
12
235
20
0
0
0
0
0
Feb
294
255
24
16
255
24
15
0
0
20
0
Tot
2,260
189
57
0
0
75
20
(a)
Method → Produce to demand (let workforce vary)
Shortages: Lost sales – Shortages not carried from month to month
All months →
$1,000
$1,300
$1,800
$200
$0
$0
$0
Mar
321
290
26
15
290
26
5
0
0
35
Apr
301
300
24
17
300
1
0
0
0
10
0
May
330
300
30
17
300
30
0
0
0
0
0
June
320
290
28
19
290
28
2
0
0
0
10
July
345
300
30
19
300
30
15
0
0
10
0
216 CHAPTER 13 AGG R EG A T E PL A N N I N G AND S&OP
Method → Produce to demand (let workforce vary)
Shortages: Lost sales – Shortages not carried from month to month
Apr
301
300
24
17
300
1
0
0
0
10
0
May
330
300
30
17
300
30
0
0
0
0
0
June
320
290
28
19
290
28
2
0
0
0
10
Regtm
$2,260,000
Ovrtm
189
Subcon
57
Holdng
0
$0
Shortg
0
$0
Summary Table—Overtime Costs: $1400
Type
Units
Cost
Regtm
2,260
$2,260,000
Ovrtm
189
$264,600
Subcon
57
$102,600
Holdng
0
$0
Shortg
0
$0
Increase
75
$0
Decrease
20
$0
Total cost = $2,627,200
All months →
$1,000
$1,200
$1,800
$200
$0
$0
$0
Capacities
Units
Month
Demnd
Regtm
Ovrtm
Subcon
Regtm
Ovrtm
Subcon
Holdng
Shortg
Increase
Decreas
e
Init
0
0
0
0
Jan
255
235
20
12
235
20
0
0
0
0
0
Feb
294
255
24
16
255
24
15
0
0
20
0
Mar
321
290
26
15
290
26
5
0
0
35
0
July
345
300
30
19
300
30
15
0
0
10
0
Aug
340
290
30
20
290
30
20
0
0
0
10
Tot
2,506
2,260
212
135
2,260
189
57
0
0
75
20
Subtotal Costs
$2 260 000
$226 800
$102 600
0
0
0
0
Summary Table—Overtime Costs: $1,200
Type
Units
Cost
Increase
75
$0
Decrease
20
$0