Develop a chase aggregate plan without inventory and back orders. Use no undertime or subcontracting. When demand
Question:
Develop a chase aggregate plan without inventory and back orders. Use no undertime or subcontracting. When demand exceeds regular plus maximum overtime production, hire enough employees to meet demand, working as much overtime as possible. When demand is less than regular time production, fire just enough workers to avoid undertime (you may then use a minimal amount of overtime to get production back up to demand) (data given above).
What is the workforce at the end of the last period?
How many total were hired? How many total were fired?
(b) How many total units were produced using overtime?
(c) What is the total cost?
(d) What is the cost per unit?
Cost data
Regular time labor cost per hour $10
Overtime time labor cost per hour $15
Subcontracting cost per unit (labor only) $80
Back order cost per unit per period $20
Inventory holding cost per unit per period $10
Hiring cost per employee $500
Firing cost per employee $400
Capacity data
Beginning workforce 40 employees
Beginning inventory 0 units
Beginning back orders 0 units
Production standard per unit (hours) 2 hours of labor per unit
Regular time available per period (hours) 160 hours per period per employee
Overtime time available per period (hours) 30 hours per period per employee
Demand data
Period 1 3,920 units Period 5 3,800 units
Period 2 2,480 units Period 6 4,340 units
Period 3 2,200 units Period 7 4,820 units
Period 4 3,280 units Period 8 4,600 units