Chapter 13. Production Planning. Production Planning in Manufacturing. Aggregate Demand Example. Aggregate Planning How many workers are needed each quarter? (each worker works 520 hours per quarter) Labor hrs needed: # workers needed:. Quarter. Aggregate Planning. 2 basic strategies:
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How many workers are needed each quarter? (each worker works 520 hours per quarter)
Labor hrs needed:
# workers needed:
2 basic strategies:
For each period,
Beg.Inv. + Production = Demand + End.Inv.
Given: beg. inv. in Qtr. 1 = 24; CC = $15 per unit per qtr.
For each period,
Production - Demand = Beg.Backlog - End.Backlog
Given: beg. BL in Qtr. 1 = 31
Quarterly demand forecasts: 85, 107, 136, 124
Carrying cost rate: $68 per unit left at end of each qtr.
Hiring/training cost rate: $125 per new person
Layoff cost rate: $50 per person
Initial inventory = 0
Currently 57 employees prior to Quarter 1
Labor standard = 250 hours per unit
Each employee works 520 hours per quarter
Which costs less, a level capacity plan or a matching demand plan?
Labor standard = 24 hours per unit
Weekly capacity = 5000 labor hours
Shifting Production Earlier
Straight-time cost rate = $10 per hour
Straight-time capacity = 20,000 hours per quarter
Labor standard = 4 hours per unit
Overtime cost rate = time-and-a-half
Overtime capacity = 20% of straight-time capacity
Outsourcing capacity = 1,000 units
Outsourcing cost = $70 per unit (plus materials)
Forecasted demand next quarter = 6,700 units
Develop a production plan that minimizes total cost.