Question: Jersey Clean It Inc. has forecasted aggregate demand for the next four quarters for its range of liquid detergent products in gallons; Quarters Forecast 1
Jersey Clean It Inc. has forecasted aggregate demand for the next four quarters for its range of liquid detergent products in gallons; Quarters Forecast 1 2600 2 4200 3 2800 4 2400 The company regular time production capacity is 3000 gallons per quarter at a per unit cost of $12. Due to safety and quality reasons, the company policy is to limit any overtime production to 10% of regular time production capacity. Overtime unit cost is $18 per gallon. Cost to produce a single gallon using parttime employees is $22. A subcontractor with a capacity of 1000 units has offered to manufacture the product at $20 per gallon as well. Assume the beginning inventory of quarter as zero. Inventory holding cost per gallon per quarter is $2 and any backlog incurs a cost of $6 per gallon per quarter. 1. Develop an aggregate plan that uses a level S&OP strategy with production sorely from cadre of regular workers. 2. Develop an aggregate plan that uses a chase S&OP strategy using regular time, overtime and part time production. 3. Develop an aggregate plan for a mixed/hybrid S&OP strategy where we meet the demand using output from regular workers and from the subcontractor
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