Design an aggregate plan using the Level-Utilization strategy

Use the following monthly forecast to create your aggregate plans:

2013 Forecast:

Month	Demand
1	6689
2	7094
3	11592
4	7458
5	9246
6	14003
7	15489
8	13135
9	11092
10	9875
11	7082
12	7500

• Assume 20 production days per month (4 weeks of 5 days each)
• The ending inventory (for December of 2012) is 3000 units
• Assume 0 units on Backorder at the end of 2012
• The number of Units produced by each worker is 200 units per month
• The desired safety stock level is 2000 units (you can only fall below this level to avoid having backorders, even in the Chase Strategy)
• Average pay applies for the first 40 hours an employee works in a week. Overtime pay applies for any time over 40 hours in a given week. The maximum level of overtime any employee can work in a month is 40 hours.
• You must employ whole people there are no part time employees. (However, you can underutilize)
• Employees do not produce more per month than is required by the plan (ie- No efficiency gains), however than can under produce to satisfy the conditions of the type of plan that you choose.
• The firm wants exactly 4000 units to be left in inventory at the end of the fiscal year (after forecasted December 2013 demand is satisfied). This is a firm requirement for all plans.
• The staffing level at the beginning of 2014 is to be the same as the original staffing level given below (any staffing changes needed to achieve this are made after the forecasted December 2013 demand is satisfied). This is a firm requirement for all plans.
• Any backorder (negative on-hand inventory) is shown as a positive value in the backorder column instead of in the inventory column since it has a different monthly cost per unit. That is, if there is backorder for a period, there will be zero on-hand inventories for that period. Be sure to fulfill backorders as soon as possible in the plan.

Assignment 2 Cost Information Table:

Inventory holding cost	$2 per unit per month based on ending inventory for month
Average pay rate	$10 an hour
Overtime pay rate	$15 an hour
Costs of hiring one additional employee	$3000
Costs of firing one employee	$2000
Original Staffing Level (12/2012)	21 employees
Material cost to produce one unit	$78
Backorder Costs	$5 per unit per month held based on ending backorder level for month

Assignment 2 Operating Constraints Table:

Maximum inventory level	25,000 units due to limited warehouse capacity and increasing interest levels.
Maximum production capacity	20,000 units/month using regular time
Satisfying Demand Priorities	Use Regular production time to meet demand if you can do so without violating the two previous constraints or the constraints of your plan type. After that, choose between using safety stock, anticipation inventory, Backorder or Overtime production. Choose the strategy that will lead to the lowest cost plan.

Material cost to produce 1 unit: 78 Materials Regular Time Production (Units) Forecast Demand Sta On-Hand Inventory Backorder Overtime Production (Units) Total Shipments (Headcount) Hire Fire (Units Made) Total Cost Dec-12 21 0 JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC Year End Ad Jan-14 Total Qty These two Cells should Total Cost equal each other as a checksum Total Plan Cost Cost per unit shipped Fill in white, blue and green cells only. Do not put values in the grey cells