Question: A large Billings, MT feed mill Longhorn Processing, prepares its 6-month aggregate plan by forecasting demand for 50 -LB bags of cattle feed as follows:

A large Billings, MT feed mill Longhorn
A large Billings, MT feed mill Longhorn
A large Billings, MT feed mill Longhorn Processing, prepares its 6-month aggregate plan by forecasting demand for 50 -LB bags of cattle feed as follows: January, 1,350 bags; February 1,500; March 1,650; April 1,550; May 2,100; and June 1,500. The feed mill plans to begin the new year with 100 bags of beginning inventory left over from the previous year, and backorders are not permitted. It projects that capacity (during regular hours) for producing bags of feed will remain constant at 800 until the end of April, and then increase to 1,100 bags per month when the planned expansion is completed on May 1st. Overtime capacity is set at 300 bags per month until the expansion, at which time it will increase to 400 bags per month. A friendly competitor in Grand Forks, ND is also available as a backup source (subcontractor) to meet demand but can provide only 500 bags per month during the 6-month period. Cost on regular time per bag is $13.25; Overtime cost is $6.25 extra; subcontracting cost $22.50. Carrying cost is 1.75 per bag. Develop a 6-month production plan for the feed mill using the transportation method. b. What there a need to hold bags from one period to the next throughout the planning period? If 50 , how many bags and what was the total cost of the bags (including the holding cost)? c. Was there any regular time unused? If so, how much? d. What there any subcontracting that was unused? If so, how many units? f. If 100 bags were required as ending inventory carried into the next period, based on evaluating the lowest cost in regards to excess capacity, how much would be added to the original total cost (include holding cost into the next planning period)

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