APPLY YOUR UNDERSTANDING

Grassboy, Ltd$.$

Grassboy. Ltd produces a line of Canadian larn mowers for borh domestic sales and

expont to the U$.$S$.$A$.$ The moners come in a variecy of engine sizes and cutting widths. In an

effort to deal with the highly seasonal nature of its denaand, Grasshoy forecasts demand for

the next eight quarters. The forecast for the next eight quarters is given in the folloring

table.

Grassboy has a single production line that can assemble $7000$ units per quarter per shift

using regular time and can assemble an addirional $25$ percent using overtime. The

assembly line can be operated for either one or two shifts; however, the union contuact

permits making changes to the number of shifts only at the beginning of a quarter. The

company is permitted to send the workers home early without pay if its plans call for pro$-$

ducing less than $7000$ units in a given quarter. The cost of adding a shift is SC$7500($Cana$-$

dian dollars$),$ and the cost of eliminating a shift is $SC14,000.$ Grassboy also has idencified

several overseas manufacturers that can produce as many of its lawn morers as needed as

subcontractors.

On average, the cost of producing a single lawn mower is $SC25$ per mower using regular

time and SC$33$ using overtime. The delivered cost of mowers produced by subconcractors is

SC$49.$ Grassboy's cost of holding a lawn mower in inventory for one quarter is SC$4,$ and the

cost of backordering a unit is $C$12$ per quarter. Inventory costs are calculared on the basis

of average inventory held during the quarter $($i$.$e$.,$ the average of the quarter's beginning

and ending inventory$).$ Backorder costs are calculated on the basis of the ending backorder

position in a given quarter.

Grassboy was operating with one shift in the quarter just ending and expects to end the

quarter wich $750$ units in inventory.

Questions

Develop an aggregare plan that calls for a constant level of employment that meets

the flyctuations in demand by using inyentory, backorders, overtime, subconcraccing.

or some eombination of these Assume that all demand$-$must$-$be me by$-$the$-$eighth$-$

quarter.

Develop an aggregare plan that mees the fluctuations in clemand by adjusting the

number of shifts.

What are the adyantages and disadvantages of the aggregate schedules you developed:

Which one pould you recommend to Grassiboy's management?

DESIGN YOUR OWN AGGREGDTE PLAN.

EXPLAIN IN ONE PARAGRDPH

SIOW CALCULDTIONS IN EXCEL.