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Demand per day(A/B) 41 Calculate the Average demand per day as below: Month Expected Production days(B) demand(A) Jan 900 22 Feb 700 18 Mar 800 21 Apr 1200 21 May 1500 22 Jun 1100 20 39 Coo aaa DP 38 57 68 55 Average requirement Total expected demand Number of production days 6200 = 50 units per day 124 If Constant work force of 7 workers is maintained and remaining is subcontracted, then Regular production rate per day = (Number of workers x Total working hours)/Time taken per unit =(7*8)/1.6 = 35 units. Month Days(A) Forecast Production Regular Subcontracting Regular Subcontracting (B) rate per production E=(B-D) production cost day(C) (D=A*C) cost(A*7*8*5) (E*12) Jan Feb Mar Apr May Jun 22 18 21 21 22 20 900 700 800 1200 1500 1100 35 35 35 35 35 35 e alla 770 630 735 735 770 700 130 70 65 465 730 6160 5040 5880 5880 6160 5600 34720 1560 840 780 5580 8760 4800 22320 400 Regular production cost is $34,720 Subcontracting cost is $22,320 QUESTION 50 Marks Manufacturer of roofing supplies has developed monthly forecasts for a family of products. Data for 6 month period (January to June) are presented in table below. Month Expected demand Production days Demand per day January 900 22 February 700 18 March 800 21 April 1200 21 May 1500 22 June 1100 20 Total 6200 124 Cost information: Inventory carrying cost Subcontracting cost per unit Average pay rate $5 per unit per month $20 per unit $10 per hour ($80 per day) $17 per hour (8h per day) $1.6 hours per unit $300 per unit Overtime pay rate Labor hours to produce a unit Cost of increasing daily production rate (hiring&training) Cost of the decreasing daily production rate (lay off) $600 per unit The firm would like to begin development of an aggregate plan. You are requested to do it