QUESTION 5

1. Discuss any two key issues to be considered whenever aggregate plans are being implemented.

b) Uzurie limited, a manufacturer of hardwood floors, is in need of an aggregate plan for 5 months of its operations. Its production manager was instructed to use the chase and level strategy methods. Data of forecasted demand and operational parameters for the 5 months are as shown below.

i Develop aggregate production plans using the tabular format shown above and complete tables 3a and 3b in your answer booklet. (10 marks)

ii Recommend the most appropriate plan to the manufacturer include a justification for your recommendation.

Data 1 2 3 4 5 6 7 8 9 10 11 no overtime allowed no subcontracting allowed regular cost of production backorder cost of production hiring cost production/employee firing costs workforce overtime cost of production inventory carrying/holding cost hiring and firing is allowed $80/unit $12/unit $120/unit 400 units per month $400/unit 30 workers prior to start of production cycle $75/unit $4/unit/month Level Production Strategy Quarter Demand # hired # fired Reg Prodn Inventory Back orders # of workers 1 10500 11500 2 3 4 5 25000 12000 15000 total cost total Table 3a # hired # fired # of workers available Chase Production Strategy Quarter Demand Regular # of prdn. workers required 1 10500 2 11500 3 25000 4 12000 5 15000 total cost total