Sitting on Maggie Brumfield€™s desk is the latest planned order report from the company€™s MRP system. Maggie€™s job is to determine if there is enough capacity to handle the workload and to level the load if it€™s uneven. She gathers the latest cost figures and gets to work. Subcontracting and hiring extra workers are not options at this point, but overtime, pulling work ahead, and postponing work are. Regular production costs $10 an hour and is limited to 40 hours a week. Overtime costs $15 an hour and cannot exceed 40 extra hours (i.e., a double shift). An inventory cost of $3 per period is assessed for each hour€™s worth of work performed in advance. Postponing work costs $20 per item per period. Use the following information to construct an initial load summary chart. Level the loads. Then create a revised chart that meets demand at the least possible cost. How much money is saved by economically leveling the load?

Transcribed Image Text:

PLANNED ORDER REPORT Week Item 90 100 250 600 160 PROCESSING TIMES Setup Time min) 15 30 50 45 Run Time Item min per unit) 15 10