if the objective is to: The Freestyle direction is considering the possibility of subcontracting a part of the skates production. In case of taking this decision, work with the minimum necessary number of workers. Elaborate an aggregate production plan and calculate the total costs.

How would I begin the January Column based on this information: Initialy (January) the workforce is composed by the 45 workers, 20 full time workers and the rest part time, working in two shifts. The numbers of initial workers should be maintained the first month. After January the maximum capacity of the plant is 30 workers each shift. The cost of full time working hour is 9,5 while the part time working hour is 9,1. It is not possible to hire or fire full time workers. In case of part time, the cost of firing is 1.550 per worker and hiring 780. If necessary, is allowed to work overtime at a cost 15% above the cost of normal working hours, been the daily limit for overtime hours 20% of regular ones (7 hours per-shift). The estimated cost for idle labor is 10 per hour If work force proposal (including overtime hours) is below capacity, you can establish a third shift. This third shift has an extra cost due to overnight production. The extra cost paid for overnight is a 25% extra per common 3 hour, and it will be totally fulfilled with temporary staff (part-time workers). in the event that a third shift is opened, an additional 8 temporary workers may be hired. These workers will only be able to work on the third shift. The third shift could not be opened in the first month. If overnight takes part, you wont be able to apply the option of overtime (restriction). Considering the inventory politicy, the number of units expected to close at the end of 2020 of safety stock is of 100 units. During 2021, a safety stock policy must be implemented in the different strategies. Stocking one pair of skates has a cost of 2 per month (holding cost). The skates are sold exclusively to a specialized retailer on sport materials. The cost of selling on delay (delay cost) the skates to this firm is of 4 per unit per month (pair of skates) until reached 500 units and of 7 per unit if the sold quantity is over 500 units. To apply this penalty you should take into account the units not delivered at the end of each month.

You have to decide the units that the company produces per month, for example the February units that are the lowest. You calculate the cost of producing these units every month during the whole year. If you divide the total annual cost of producing the units you have decided on by the total units produced, you will have the cost per unit of the units. The company has to subcontract the rest of the units to be produced at a cost per unit lower than its own cost per unit.

PRODUCTION PLANNING STRATEGY - SUBCONTRACTING STRATEGY (S&OP) January 12,950 20 February 6,405 March 7,840 April 9,240 21 Demand forecast Number of working days May 11,060 23 June 18,060 JU 18. 20 21 23 2 February March April May June Jo DATA Hours to produce a pair in regular day Hours per working day % max production with overtime Full-time workers Part-time workers N workers by shift Cost regular hour full time workers Cost regular hour part-time workers Cost overtime hour (in % over regular hour) Full-time workers in night shift Extra cost night shift (in % over regular hour) Idle time hour cost Hiring cost Layoff cost Holding cost Cost of service -500 units delay Cost of service +500 units delay Safety stock Stock 31 december 2019 Delay orders 21 dec 2019 PRODUCTION PLAN: SUBCONTRACTING STRATEGY January Demand forecast Number of working days Regular Production hours Overtime production hours Night shift Production hours Full-time workers Part-time workers Change in part time workers Final Stock Delay units Total units to be produced Cost workers regular time Overtime hours cost Extra cost night shift Hiring and layoff cost Cost of idle workers Holding cost Delay cost TOTAL COST PRODUCTION PLANNING STRATEGY - SUBCONTRACTING STRATEGY (S&OP) January 12,950 20 February 6,405 March 7,840 April 9,240 21 Demand forecast Number of working days May 11,060 23 June 18,060 JU 18. 20 21 23 2 February March April May June Jo DATA Hours to produce a pair in regular day Hours per working day % max production with overtime Full-time workers Part-time workers N workers by shift Cost regular hour full time workers Cost regular hour part-time workers Cost overtime hour (in % over regular hour) Full-time workers in night shift Extra cost night shift (in % over regular hour) Idle time hour cost Hiring cost Layoff cost Holding cost Cost of service -500 units delay Cost of service +500 units delay Safety stock Stock 31 december 2019 Delay orders 21 dec 2019 PRODUCTION PLAN: SUBCONTRACTING STRATEGY January Demand forecast Number of working days Regular Production hours Overtime production hours Night shift Production hours Full-time workers Part-time workers Change in part time workers Final Stock Delay units Total units to be produced Cost workers regular time Overtime hours cost Extra cost night shift Hiring and layoff cost Cost of idle workers Holding cost Delay cost TOTAL COST