Owens Corning Fiberglas (OCF) makes several types, weights, and widths of Fiberglas mats from chopped strands of fibreglass for boat hulls on two production lines in a plant.

Aggregate planning for OCF involves choosing a certain number of shifts (1 to 4, i.e., 40, 80, 120, or 160 hours of operation per week), depending on forecast demand. MPS is determined by optimization, minimizing product change-over, production, and inventory costs. Product change-over takes between 0.5 and 1 hour, and is sequence dependent, taking longest for fiberglass type change, and least for width change. Change-over cost includes loss of profit, direct labour, and mat waste.

For simplicity, we will consider only one production line and two products: light (3/4 ounce/ft, 76 inches wide), and heavy (1.5 ounces/ft , 76 inches wide) mats. The forecast for the next eight weeks for light mat is 110,000 pounds, and for heavy mat is 120,000 pounds. Given the aggregate plan, the line can make 370,000 pounds of light or 185,000 pounds of heavy mats during each of the next eight weeks. Instead of optimization we will use the Economic Production Quantity EPQ for each mat.

a. If product change-over cost from heavy to light is $1,100 and from light to heavy is $1,500, holding cost rate is 12% per year, price of light mat is $0.75 per pound, price of heavy mat is $0.50 per pound, and demand occurs 50 weeks a year, calculate the EPQ for each product. (Enter the answers in thousand pounds.)

	EPQ
Light	pounds
Heavy	pounds

b. If there are 230,000 pounds of light and 240,000 pounds of heavy mats on hand, determine which product will run out first.

multiple choice

• Light

• Heavy

c. Determine the planned production for the two products so that neither products projected on hand becomes negative, but their production lot sizes are close to their EPQ. If one of the products will be short, interrupt the production of the other and start making the short product. (Enter the answers in thousand pounds. Do not leave any empty spaces; input a "0" wherever it is required.)

Light mat:

				Week
	1	2	3	4	5	6	7	8
Forecast	110	110	110	110	110	110	110	110
Committed
Projected on hand (min = 0) 120
Produce (lot size = 370)
Available-to-promise

Heavy mat:

				Week
	1	2	3	4	5	6	7	8
Forecast	120	120	120	120	120	120	120	120
Committed
Projected on hand (min = 0) 120
Produce (lot size = 185 3)
Available-to-promise