Step 1: Prepare Your Aggregate Plan

Use the Excel OM Aggregate Planning spreadsheet and the data to prepare your aggregate plan. Produce a graph of your plan. The intent is to use a level strategy (or level scheduling) with no overtime, no safety stock, and no subcontractors.

Hint 1 - Need to consider that it takes 1.5 hours to produce a unit when determining your cost per unit for average and overtime pay.

Hint 2 - To determine regular time production, you need to multiply the units per day produced by the number of production days.

Step 2: Update Your Aggregate Plan Using Overtime

In the plan produced in Step 1, the production rate did not meet the total demand. If you were able to use overtime to meet the shortfall, what would your aggregate plan look like?

Use the Excel OM Aggregate Planning spreadsheet and the data to prepare an updated aggregate plan.

Step 3: Update Your Aggregate Plan Using Outsourcing

Instead of paying overtime, you might be able to outsource the shortfall in production. Use the Excel OM Aggregate Planning spreadsheet and the data to prepare an updated aggregate plan using outsources instead of paying overtime.

Step 4: Summarize and Submit

On a fourth tab of the spreadsheet, summarize your cost and determine which of the three options produces the lowest overall cost.

This chart provides the variables and cost for each variable. Variables Cost Inventory carrying cost Subcontracting cost Average pay rate Overtime pay rate Labor-hours needed to produce one unit Units per day produced Beginning inventory Planned ending inventory Lost sales per unit $6 per unit per month $25 per unit $12.50 per hour (8 hours per day) $18 per hour (above 8 hours per day) 1.5 hours per unit 50 0 0 $100 This chart provides the demand for the product and the number of production days per month. Months Demand Production Days 1200 22 800 18 600 21 January February March April May June 21 1500 1400 22 1300 20 Complete the steps in each section and then submit your assignment for grading. Submit one spreadsheet containing a tab for each step