QUESTION 1

In order to forecast the demand for the winter months of 2020, Easy Sew Peasy would like to prepare a aggregate plan for the next six periods. Mr. Pea employs 25 manufacturing workers that each produce 200 jackets per month. Manufacturing of these jackets will incur the following costs:

• Regular time = R 88.00 per jacket produced
• Overtime = R 150.00 per jacket produced ·
• Subcontracting = R 190.00 per jacket produced ·
• Inventory = R 76.00 per jacket per period based on average inventory ·
• Back-order = R 102.00 per jacket per period

a) Using the information above, prepare a level output aggregate plan. Any discrepancy will only be covered with backlogs and back orders.

Period	1	2	3	4	5	6	Total
Forecast	3 500	4 000	5 000	6 000	7 500	4 000	30 000
Output
Regular
Overtime
Subcontract
Output - forecast
Inventory
Beginning
Ending
Average
Backlog
Costs
Regular
Overtime
Subcontract
Inventory
Back-order
Total

b) Three of Easy Sew Peasy's employees have resigned. Due to economic uncertainty, Easy Sew Peasy's management decides that they will not employ someone in those people's place. They will rather make up the difference in output through overtime. The use of backlogs have proofed to be successful in the past and are permitted in this plan as well. The company will recoup the total lost production by working overtime in these periods, which amounts to 3600 jackets in total. To accommodate this difference, the business will use overtime in periods 3, 4 and 5 as these periods represent the winter months of June, July and August.

Period	1	2	3	4	5	6	Total
Forecast	3 500	4 000	5 000	6 000	7 500	4 000	30 000
Output
Regular
Overtime
Subcontract
Output - forecast
Inventory
Beginning
Ending
Average
Backlog
Costs
Regular
Overtime
Subcontract
Inventory
Back-order
Total

c) Mr. Pea has indicated that he might be able to convince one worker to return. Additionally, he is willing to consider using subcontracting to make up the rest loss of production capacity. He is however unsure of the impact this will have on the total costs of the operation. You are required to prepare a aggregate plan using subcontracting to recoup the production losses of two workers during the periods with the highest demand. Backlogs are still permitted.

Period	1	2	3	4	5	6	Total
Forecast	3 500	4 000	5 000	6 000	7 500	4 000	30 000
Output
Regular
Overtime
Subcontract
Output - forecast
Inventory
Beginning
Ending
Average
Backlog
Costs
Regular
Overtime
Subcontract
Inventory
Back-order
Total

d) Indicate the negative aspects of each of the three plans above and indicate which plan Easy Sew Peasy should implement and motivate your answer.

Answer rating: 100% (QA)

a Level output 25 workers 200 jackets per worker per month 5000 jackets per month Level ou... View the full answer