Question: A foundry produces cast-iron ingots. While preparing a three month aggregate plan, the operations manager uncovered the following information: The cost of producing a batch
A foundry produces cast-iron ingots. While preparing a three month aggregate plan, the operations manager uncovered the following information:
The cost of producing a batch of ingots is $100 per regular shift hour, and $140 for overtime hours. Inventory carrying cost is $4 per batch per month. There are 50 batches of inventory left over from December.
| Month | Regular Time Capacity (batches) | OT Capacity (batches) | Demand (batches) |
| Jan. | 2,880 | 355 | 3,000 |
| Feb. | 2,780 | 315 | 2,750 |
| March | 2,760 | 305 | 2,950 |
Use the transportation method, and assume that backlogs are not permitted. Subcontracting is not available.
What is the optimal cost? [ Select ] ["$874,320", "$902,640", "$881,230", "$911,680"]
How much unused regular time capacity is there? [ Select ] ["2880", "0", "285", "745"] batches
How much unused overtime time capacity is there? [ Select ] ["745", "8,700", "0", "965"] batches
Suppose that the foundry discovers that customers are willing to wait for their orders, and there is no cost to the foundry. In other words, backlogging is permitted at $0 cost.
What is the optimal cost now? [ Select ] ["$874,320", "$874,200", "$868,770", "$881,440"]
How many total batches are backlogged for at least 1 month? [ Select ] ["70", "745", "0", "340"] batches
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