1 Prepare an aggregate plan for the coming year, assuming that the sales forecast is perfect. Use the spreadsheet "Bradford Manufacturing" from this book's DVD. In the spreadsheet an area has been designated for your aggregate plan solution. Supply the number of packaging lines to run and the number of overtime hours for each quarter. You will need to set up the cost calculations in the spreadsheet. You may want to try using the Excel Solver to find a solution. You will need to "unprotect" the spreadsheet to run the Solver (Tools > Protection > Unprotect). You will also need to set the "not-negativity" box in the "options" area. Remember that your final solution needs an integer number of lines and an integer number of overtime hours for each quarter. (Solutions that require 8.9134 lines and 1.256 hours of overtime are not feasible.) THE SITUATION You are the operations manager for a manufacturing plant that produces pudding food products. One of your important responsi- bilities is to prepare an aggregate plan for the plant. This plan is an important input into the annual budget process. The plan provides information on production rates, manufacturing labor requirements, and projected finished goods inventory levels for the next year. You make those little boxes of pudding mix on packaging lines in your plant. A packaging line has a number of machines that are linked by conveyors. At the start of the line the pudding is mixed; it is then placed in small packets. These packets are inserted into the small pudding boxes, which are collected and placed in cases that hold 48 boxes of pudding. Finally, 160 cases are collected and put on a pallet. The pallets are staged in a shipping area from which they are sent to four distribution centers. Over the years, the tech- nology of the packaging lines has improved so that all the different flavors can be made in relatively small batches with no setup time to switch between flavors. The plant has 15 of these lines, but cur- rently only 10 are being used. Six employees are required to run each line. The demand for this product fluctuates from month to month. In addition, there is a seasonal component, with peak sales before Thanksgiving, Christmas, and Easter each year. To complicate matters, at the end of the first quarter of each year the marketing group runs a promotion in which special deals are made for large purchases. Business is going well, and the company has been expe- riencing a general increase in sales. The plant sends product to four large distribution warehouses strategically located in the United States. Trucks move product daily. The amounts shipped are based on maintaining target inven- tory levels at the warehouses. These targets are calculated based on anticipated weeks of supply at each warehouse. Current targets are set at two weeks of supply. In the past, the company has had a policy of producing very close to what it expects sales to be because of limited capacity for storing finished goods. Production capacity has been adequate to support this policy.

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3,000 2,500 2,000 1,500 1,000 500 0 Forecast Demand by Quarter (1,000 Case Units) b 1st (1-13) 2nd (14-26) 3rd (27-39) 4th (40-52) 1st (Next Year)