1. (20 points) SummerFun, Inc., produces a variety of recreation and leisure products. The production manager has developed an aggregate forecast: Month Forecast April 28 May 38 June 34 July 31 August Sept. 36 38 Oct. 30 Total 235 Holding cost $12 per unit per month Back-order cost $30 per unit Beginning inventory 4 Regular production cost $60 per unit Overtime production cost $90 per unit Subconstracting cost $120 per unit Regular capacity 30 units per month Overtime capacity 5 units per month Subcontracting capacity 10 units per month Develop an aggregate plan using each of the following guidelines and compute the total cost for each plan. Which plan has the lowest total cost? a. Use a level strategy. Use a combination of backlogs, subcontracting, and inventory to handle variations in demand. (Make sure that you don't have backlogs at the end of October.) b. Use regular production. Supplement using inventory, overtime, and subcontracting as needed. No backlogs allowed. a. Use a level strategy. Use a combination of backlogs, subcontracting, and inventory to handle variations in demand. (Overtime is also used) b. Use regular production. Supplement using inventory, overtime, and subcontracting as needed. No backlogs allowed. April 28 May 38 June 34 July 31 August 36 Sept. 38 Oct. 30 Total 235 April 28 May 38 June 34 July 31 August 36 Sept. 38 Oct. 30 Total 235 | Period Forecast Output Regular Overtime Subcontract Output-Forecast Inventory Beginning Ending Average Backlog Period Forecast Output Regular Overtime Subcontract Output-Forecast Inventory Beginning Ending Average Backlog Cost Cost Output Regular Overtime Subcontract Inventory Average Backlog Total Output Regular Overtime Subcontract Inventory Average Backlog Total 1. (20 points) SummerFun, Inc., produces a variety of recreation and leisure products. The production manager has developed an aggregate forecast: Month Forecast April 28 May 38 June 34 July 31 August Sept. 36 38 Oct. 30 Total 235 Holding cost $12 per unit per month Back-order cost $30 per unit Beginning inventory 4 Regular production cost $60 per unit Overtime production cost $90 per unit Subconstracting cost $120 per unit Regular capacity 30 units per month Overtime capacity 5 units per month Subcontracting capacity 10 units per month Develop an aggregate plan using each of the following guidelines and compute the total cost for each plan. Which plan has the lowest total cost? a. Use a level strategy. Use a combination of backlogs, subcontracting, and inventory to handle variations in demand. (Make sure that you don't have backlogs at the end of October.) b. Use regular production. Supplement using inventory, overtime, and subcontracting as needed. No backlogs allowed. a. Use a level strategy. Use a combination of backlogs, subcontracting, and inventory to handle variations in demand. (Overtime is also used) b. Use regular production. Supplement using inventory, overtime, and subcontracting as needed. No backlogs allowed. April 28 May 38 June 34 July 31 August 36 Sept. 38 Oct. 30 Total 235 April 28 May 38 June 34 July 31 August 36 Sept. 38 Oct. 30 Total 235 | Period Forecast Output Regular Overtime Subcontract Output-Forecast Inventory Beginning Ending Average Backlog Period Forecast Output Regular Overtime Subcontract Output-Forecast Inventory Beginning Ending Average Backlog Cost Cost Output Regular Overtime Subcontract Inventory Average Backlog Total Output Regular Overtime Subcontract Inventory Average Backlog Total
