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
May 800 1,500 Layoff cost/worker
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) 270 240
Ending inventory (‘000s) 100 50
Minimum inventory percentage = 0.15 0.15
Aggregate Plan Decision Variables (demand, inventory, production in ‘000s) Constraints
Ht Lt Wt Ot Router Switch Router Switch Router Switch
Period # Hired # Laid off # Workforce Overtime Inventory Inventory Production Production Demand Demand
Router
Inventory
Switch
Inventory
Overtime Production
Min
Router
Inventory
Min
Switch
Inventory
0 0 0 6,300 0 270 240
1 0 0 6,300 0.0 240.0 210.0 1,770 1,570 1,800 1,600 0 0 126000 155743.3 0 0
20 0 6,300 0.0 390.0 1298.7 1,750 2,489 1,600 1,400 0 0 126000 9306.7 0 1073.66
3 0 0 6,300 0.0 375.0 671.5 2,585 873 2,600 1,500 0 0 126000 0.0 0 371.49
40 0 6,300 0.0 120.0 225.0 2,245 1,554 2,500 2,000 0 0 126000 0.0 0 0
5 0 0 6,300 0.0 270.0 135.0 950 1,410 800 1,500 0 0 126000 456016.7 0 0
60 0 6,300 0.0 180.0 105.0 1,710 870 1,800 900 0 0 126000 292430.0 0 0
7 0 0 6,300 0.0 210.0 120.0 1,230 715 1,200 700 0 0 126000 478423.3 0 0
80 0 6,300 0.0 375.0 1284.2 1,565 1,964 1,400 800 0 0 126000 158453.3 0 1074.15
9 0 0 6,300 0.0 420.0 837.1 2,545 953 2,500 1,400 0 0 126000 0.0 0 582.06
10 0 0 6,300 0.0 150.0 120.0 2,530 983 2,800 1,700 0 0 126000 0.0 0 0
11 0 0 6,300 0.0 150.0 135.0 1,000 815 1,000 800 0 0 126000 538500.0 0 0
12 0 0 6,300 0.0 270.0 240.0 1,120 1,005 1,000 900 0 0 126000 466793.3 0 0
Costs
Period Hiring Lay off Regular Time Overtime Inventory Stockout
1 0 0 10,080,000 0 930,000 0
20 0 10,080,000 0 2,468,660 0
3 0 0 10,080,000 0 1,796,490 0
40 0 10,080,000 0 585,000 0
5 0 0 10,080,000 0 945,000 0
60 0 10,080,000 0 645,000 0
7 0 0 10,080,000 0 750,000 0
80 0 10,080,000 0 2,409,150 0
9 0 0 10,080,000 0 2,097,060 0
10 0 0 10,080,000 0 570,000 0
11 0 0 10,080,000 0 585,000 0
12 0 0 10,080,000 0 1,050,000 0
Total Cost =
0.0
500.0
3000.0
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Month
Router Production Plan
0.0
500.0
3000.0
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Month
Switch Production Plan
–
500
3,000
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Month
Production vs. Demand by Month