Question: A company has hired you to develop an aggregate plan to determine the number of workers they will need for the next 9 months (

A company has hired you to develop an aggregate plan to determine the number of workers they will need for the next 9 months (February through October). This company makes 8 different products. The time (in hours) required to produce each product is as follows:
Product Number of hours to produce 1 unit
Product A 1.14
Product B 2.34
Product C 2.03
Product D 2.82
Product E 1.15
Product F 2.46
Product G 2.78
Product H 0.94
Suppose the following demands for each product have been forecast for the next 9 months:
Month # days per month Forecast Demand
Product A Product B Product C Product D Product E Product F Product G Product H
February 2898044252615363731332260182
March 21167464498723875402511462311
April 30109249066518944131832352227
May 296152593781249213944178110
June 2774231145011132411043180124
July 2949819230292419866117281
August 21152564795522735122153460256
September 2141518923279116168411973
October 24108144659415113611390281201
When developing aggregate plans the company assumes workers regularly work 8 hours each day; no overtime or subcontracting will be used. The firm would like to maintain a minimum buffer inventory (i.e. safety stock) each month (see table below). The starting inventory level (i.e. inventory at end of January), desired inventory at the end of the planning horizon (in addition to monthly safety stock), initial workforce level, hiring cost, firing cost, regular time cost, and inventory holding cost (in $ per aggregate unit per month) are shown in the table below. Based on the aggregate forecast demand and planning parameters (in table below), determine the number of workers this company will need over the next 9 months using the following aggregate planning strategies.
Safety Stock (in aggregate units)700
Beginning of planning horizon Inventory (in aggregate units)900
End of planning horizon Inventory, additional to any SS (in aggregate units)0
# workers employed at end of January 45
Hiring Cost (in $ per hired worker) $800
Firing Cost (in $ per fired worker) $600
Regular Time Cost (in $ per hour) $30.00
Inventory Holding Cost (in $ per aggregate unit per month) $7.25
a. Find the minimum constant workforce needed to meet demand assuming no shortages are allowed (i.e. no negative inventory in any month). What is the cost associated with this constant workforce strategy? Note: use scheduled idle time to find the minimum cost solution.
b. Find the number of workers needed each month using the zero inventory strategy (no shortages allowed). What is the cost associated with this zero inventory workforce strategy? Note: use scheduled idle time to find the minimum cost solution.
c. Find the number of workers needed each month using a mixed strategy (no shortages allowed). What is the cost associated with this mixed strategy? Note: use scheduled idle time to find the minimum cost solution.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!