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 6$ 4
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 Router Switch Router Switch
Period # Hired # Laid off # Workforce Overtime Inventory Inventory Subcontract Production Production Demand Demand
Router
Inventory
Switch
Inventory
Workforc
e
Overtime Production
0 0 0 6,300 0 100 50 0
1 – 654 5,646 0.0 0.0 467.2 0 0 1,700 2,017 1,800 1,600 0 0 0 2258583 0.0
2– – 5,646 0.0 0.0 1284.6 0 0 1,600 2,217 1,600 1,400 0 0 0 2258583 0.0
3 – – 5,646 0.0 0.0 0.0 0 0 2,600 215 2,600 1,500 0 0 0 2258583 0.0
4– – 5,646 264066.7 0.0 0.0 0 0 2,500 2,000 2,500 2,000 0 0 0 1994517 0.0
5 – 1,685 3,961 0.0 0.0 701.0 0 0 800 2,201 800 1,500 0 0 0 1584417 0.0
6– – 3,961 0.0 0.0 0.0 0 0 1,800 199 1,800 900 0 0 0 1584417 0.0
7 – – 3,961 0.0 0.0 700.2 0 0 1,200 1,400 1,200 700 0 0 0 1584417 0.0
8– – 3,961 0.0 0.0 900.0 0 0 1,400 1,000 1,400 800 0 0 0 1584417 0.0
9 – – 3,961 283733.3 0.0 0.0 0 0 2,500 500 2,500 1,400 0 0 0 1300683 0.0
10 – – 3,961 583833.3 0.0 0.0 0 0 2,800 1,700 2,800 1,700 0 0 0 1000583 0.0
11 – – 3,961 0.0 0.0 0.0 0 0 1,000 800 1,000 800 0 0 0 1584417 166766.7
12 2,339 – 6,300 0.0 100.0 50.0 0 0 1,100 950 1,000 900 0 0 0 2520000 482633.3
0
Costs
Period Hiring Lay off Regular Time Overtime Inventory Stockout
1 0 653,542 9,034,333 0 467,200 0
20 0 9,034,333 0 1,284,600 0
3 0 0 9,034,333 0 0 0
40 0 9,034,333 3,961,000 0 0
5 0 1,685,417 6,337,667 0 701,000 0
60 0 6,337,667 0 0 0
7 0 0 6,337,667 0 700,200 0
80 0 6,337,667 0 900,000 0
9 0 0 6,337,667 4,256,000 0 0
10 0 0 6,337,667 8,757,500 0 0
11 0 0 6,337,667 0 0 0
12 1,637,271 0 10,080,000 0 350,000 0
Total Cost =
115,934,729$
Switch
Subcontract