Aggregate Planning Exercise Vandal snacks has decided to introduce a new line of premium student focused Snacks that will include several "unique" flavors. The marketing manager, Joe Vandal, is predicting an increase in demand for their snacks based on the new line. He has prepared the following aggregate forecasts for the next six months (quantities are in truckloads) Month Forecast Aug 50 Sept 60 Oct 70 Nov 90 Dec 80 Jan 70 Total 420 Production manager, Jane Vandal, has developed the following cost information (all costs are in thousands of dollars). $1 per truckload Regular Production Cost Regular Production Capacity Overtime Production Cost Subcontracting Cost Holding Cost Backorder Cost Beginning Inventory 60 truckloads $1.6 per truckload $1.8 per truckload $2 per truckload Not allowed O truckloads The following strategies are being considered: 1. Level production supplemented by up to 10 truckloads a month from overtime. 2. A combination of overtime, inventory, and subcontracting. Where regular production would be the same each month. 3. Using overtime for up to 15 truckloads a month, along with inventory to handle variations Regular production would be the same each month. Questions 1. Your goal is to determine which plan has the lowest cost. Which plan would you recommend? What is driving the lower cost? What issues/regulations/influences/etc. might change your recommendation? 2. We can assume it to be best to share information with the supply chain partners. What information should be shared, and why is it important to share this information? What information might not be shared and why? Vandal snacks has decided to introduce a new line of premium student focused snacks that will include several "unique" flavors. The marketing manager, Joe Vandal, is predicting an increase in demand for their snacks based on the new line. He has prepared the following aggregate forecasts for the next six months (quantities are in truckloads). Month Forecast Aug 50 Sept 60 Oct 70 Nov 90 Dec 80 Jan 70 Total 420 Production manager, Jane Vandal, has developed the following cost information (all costs are in thousands of dollars). $1 per truckload Regular Production Cost Regular Production Capacity Overtime Production Cost Subcontracting Cost Holding Cost Backorder Cost Beginning Inventory 60 truckloads $1.6 per truckload $1.8 per truckload $2 per truckload Not allowed O truckloads The following strategies are being considered: 1. Level production supplemented by up to 10 truckloads a month from overtime. 2. A combination of overtime, inventory, and subcontracting. Where regular production would be the same each month. 3. Using overtime for up to 15 truckloads a month, along with inventory to handle variations. Regular production would be the same each month. Questions 1. Your goal is to determine which plan has the lowest cost. Which plan would you recommend? What is driving the lower cost? What issues/regulations/influences/etc... might change your recommendation? 2. We can assume it to be best to share information with the supply chain partners. What information should be shared, and why is it important to share this information? What information might not be shared and why