Individual Assignment

$1.$ Aggregate Production Planning

Stan has a problem. He must prepare an aggregate production plan for his boss as soon as possible. However, he doesn$$t know the best way to use his workers or his machines. He has the following information:

Cost to hire: $$100$ per worker

Cost to layoff: $$400$ per worker

Total Capacity: $14,000$ units per quarter

Inventory costs: $$5$ per unit per quarter

Demand schedule:

Q$19,000$

Q$210,000$

Q$37,500$

Q$412,000$

Stan cannot subcontract work or let orders go unfilled or pay overtime. He knows each worker can produce $25$ units per quarter and workers must make whole units. He has $10$ workers on staff right now and when hiring he cannot hire partial$/$fractional workers. Help Stan develop an Aggregate Production Plan that minimizes overall costs yet meets capacity requirements. He will retain his work force at the end of the quarter. Use the following Excel template APP$1.$XLSX to assist in solving the following:

a$.$ First try a level strategy. What are the advantages$/$disadvantages with this strategy?

b$.$ Second try a chase strategy. What are the advantages$/$disadvantages with this strategy?

c$.$ Third, try a mixed strategy. What are the advantages$/$disadvantages of this strategy?