Input Data (Demand) Input Data (Costs etc.)
Month Routers Switches Item Router Switch
January 1,800 1,600 Materials cost/unit
February 1,600 1,400 Inventory holding cost/unit/month 3.0 1.0
March 2,600 1,500 Marginal cost of stockout/unit/month
April 2,500 2,000 Hiring and training cost/worker 700$
May 800 1,500 Layoff cost/worker 1,000$
June 1,800 900 Labor hours required/unit 0.3333 0.1667
July 1,200 700 Regular time cost/hour 10.0
August 1,400 800 Over time cost/hour 15.0
September 2,500 1,400 Marginal subcontracting cost/unit
October 2,800 1,700
November 1,000 800 Initial Workforce size 6300
December 1,000 900 Maximum overtime per worker per month 20
Starting inventory (‘000s) 100 50
Ending inventory (‘000s) 100 50
Productivity loss during first two months = 0.5
Aggregate Plan Decision Variables (demand, inventory, production in ‘000s) Constraints
Ht Lt Wt Ot Router Switch Router Switch Router Router Switch Router Switch
Period # Hired # Laid off # Workforce Overtime Inventory Inventory Stockout Stockout Subcontract Production Production Demand Demand
Router
Inventor
y
Switch
Inventor
y
Workforc
e
Overtime Production
0 0 0 6,300 0 100 50 0 0
1 0 378 5,922 0.0 0.0 734.8 0 0 0 0 1700 2285 1,800 1,600 0 0 0 118434.3 0.0
20 0 5,922 0.0 0.0 1819.7 0 0 0 0 1,600 2,485 1,600 1,400 0 0 0 118434.3 0.0
3 0 0 5,922 0.0 0.0 804.5 0 0 0 0 2,600 485 2,600 1,500 0 0 0 118434.3 0.0
40 0 5,922 118434.3 100.0 0.0 0 0 0 0 2,600 1,195 2,500 2,000 0 0 0 0 0.0
5 0 1234 4,687 0.0 100.0 0.0 0 0 0 0 800 1,500 800 1,500 0 0 0 93750 233333.3
60 0 4,687 0.0 100.0 0.0 0 0 0 0 1,800 900 1,800 900 0 0 0 93750 0.0
7225 0 4,913 0.0 100.0 1508.2 0 0 0 0 1,200 2,208 1,200 700 0 0 0 96003.54 0.0
8272 0 5,185 0.0 100.0 2647.1 0 0 0 0 1,400 1,939 1,400 800 0 0 0 98726.85 0.0
9 0 0 5,185 100980.4 100.0 1700.0 0 0 0 0 2,500 453 2,500 1,400 0 0 0 0 0.0
10 0 0 5,185 103703.7 100.0 0.0 0 0 0 0 2,800 0 2,800 1,700 0 0 0 0 0.0
11 0 0 5,185 0.0 100.0 0.0 0 0 0 0 1,000 800 1,000 800 0 0 0 103703.7 362963.0
12 1115 0 6,300 0.0 100.0 50.0 0 0 0 0 1,000 950 1,000 900 0 0 0 114851.9 427148.1
21,000 15,200 21,000 15,200
Costs
Period Hiring Lay off Regular Time Overtime Inventory Stockout Subcontract
1 0 378,283 9,474,747 0 734,848 0 0
20 0 9,474,747 0 1,819,697 0 0
3 0 0 9,474,747 0 804,545 0 0
40 0 9,474,747 1,776,515 300,000 0 0
5 0 1,234,217 7,500,000 0 300,000 0 0
60 0 7,500,000 0 300,000 0 0
7 157,748 0 7,860,566 0 1,808,170 0 0
8190,632 0 8,296,296 0 2,947,059 0 0
9 0 0 8,296,296 1,514,706 2,000,000 0 0
10 0 0 8,296,296 1,555,556 300,000 0 0
11 0 0 8,296,296 0 300,000 0 0
12 780,370 0 10,080,000 0 350,000 0 0
Total Cost =
123,577,088$
Switch
Subcontract