Link's Lumber manufactures pressure-treated wood materials that it aggregates into metric tons of output for medium-term capacity planning. Link's follows level production schedules calculated at 6-month intervals, determining the level production rate that minimizes inventory while meeting all demand over those 6 months. Link's latest aggregate plan is nearly over, so it begins the next planning cycle with this forecast for the next 6 months: 

Link's Lumber will begin month 1 with nothing in inventory and will pro- duce the same amount in each of the 6 months of the planning period.

Questions 

1. Prepare a chart similar to Figure 11.4, showing both cumulative demand and cumu- lative production for Link's Lumber over the next 6 months. Indicate the natural planning horizon on this chart. 2. What is the minimum constant production (MCP) rate that Link's Lumber should use during each of these next 6 months? 3. When is the accumulated inventory of metric tons of output highest during this 6-month plan, and what does it peak at?

Transcribed Image Text:

Month Month Month Month Month Month 1 2 3 4 5 6 Demand (metric tons) 1,000 1,000 5,000 20,000 7,000 3,000