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 months February through October This company makes different products. The time in hours required to produce each product is as follows:
Product Number of hours to produce unit
Product A
Product B
Product C
Product D
Product E
Product F
Product G
Product H
Suppose the following demands for each product have been forecast for the next months:
Month # days per month Forecast Demand
Product A Product B Product C Product D Product E Product F Product G Product H
February
March
April
May
June
July
August
September
October
When developing aggregate plans the company assumes workers regularly work hours each day; no overtime or subcontracting will be used. The firm would like to maintain a minimum buffer inventory ie safety stock each month see table below The starting inventory level ie 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 months using the following aggregate planning strategies.
Safety Stock in aggregate units
Beginning of planning horizon Inventory in aggregate units
End of planning horizon Inventory, additional to any SS in aggregate units
# workers employed at end of January
Hiring Cost in $ per hired worker $
Firing Cost in $ per fired worker $
Regular Time Cost in $ per hour $
Inventory Holding Cost in $ per aggregate unit per month $
a Find the minimum constant workforce needed to meet demand assuming no shortages are allowed ie 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.
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