An organization wants to prepare an aggregate plan for its manufacturing facility. The relevant information is shown
Question:
An organization wants to prepare an aggregate plan for its manufacturing facility. The relevant information is shown as follows:
Production time: 1 hour per unit
Beginning inventory: 500 units
Average labor cost: $10 per hour
Safety stock: 50% of monthly demand
Workweek: 5 days,
Shift length: 8 hours
Shortage cost: $20 per unit per month
Days per month: 20 work days/month
Carrying cost: $5 per unit per month
Management prefers to keep a constant workforce and production level, absorbing variations in demand through inventory excesses and shortages. Demand not met is carried over to the following month. Develop an aggregate plan that will meet the demand and other conditions of the problem
Cost Accounting A Managerial Emphasis
ISBN: 978-0133138443
7th Canadian Edition
Authors: Srikant M. Datar, Madhav V. Rajan, Charles T. Horngren, Louis Beaubien, Chris Graham