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
Period # Hired # Laid off # Workforce Overtime Production Production Demand Demand
Router
Inventory
Switch
Inventory
Workforc
e
Overtime Production
0 0 0 6,300 0
1 0 1144 5,156 0.0 1,700 1,550 1,800 1,600 0 0 0 103125 0.0
20 0 5,156 0.0 1,600 1,750 1,600 1,400 0 0 0 103125 0.0
31486 0 6,642 0.0 2,600 1,176 2,600 1,500 0 0 0 132843.1 0.0
40 0 6,642 132843.1 2,600 1,974 2,500 2,000 0 0 0 0 0.0
5 0 2684 3,958 0.0 800 2,200 800 1,500 0 0 0 79166.67 0.0
60 0 3,958 0.0 1,800 200 1,800 900 0 0 0 79166.67 0.0
7 0 469 3,490 0.0 1,200 950 1,200 700 0 0 0 69791.67 0.0
80 0 3,490 0.0 1,400 550 1,400 800 0 0 0 69791.67 0.0
93226 0 6,716 0.0 2,500 1,447 2,500 1,400 0 0 0 134313.7 0.0
10 0 0 6,716 134313.7 2,800 1,653 2,800 1,700 0 0 0 0 0.0
11 0416 6,300 0.0 1,000 800 1,000 800 0 0 0 126000 541333.3
12 0 0 6,300 0.0 1,000 950 1,000 900 0 0 0 126000 516333.3
21,000 15,200 21,000 15,200
Costs
Period Hiring Lay off Regular Time Overtime
1 0 1,143,750 8,250,000 0
20 0 8,250,000 0
3 1,040,135 0 10,627,451 0
40 0 10,627,451 1,992,647
5 0 2,683,824 6,333,333 0
60 0 6,333,333 0
7 0 468,750 5,583,333 0
80 0 5,583,333 0
9 2,258,272 0 10,745,098 0
10 0 0 10,745,098 2,014,706
11 0 415,686 10,080,000 0
12 0 0 10,080,000 0
Total Cost =
119,379,730$
0
1,000
2,000
4,000
5,000
6,000
7,000
8,000
1 2 3 4 5 6 7 8 9 10 11 12 13
# Hired
# Laid off
# Workforce
–
500
1,500
2,000
2,500
3,000
12345678910 11 12
Month
Router Production Plan
Production
Demand
–
500
1,000
1,500
2,000
2,500
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Month
Switch Production Plan
Production
Demand
–
500
1,500
2,000
2,500
3,000
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Month
Production vs. Demand by Month
Router production
Switch Production
Router demand
Switch demand