A company division only produces one product group. The aggregate demand for the entire product group is expected to be 700, 1000, 800, 1100, 1000 and 700 in the next 6 months. The individual products occupy the production facility similarly. The opening stock for the half year is 100 units. Production and demand are assumed to take place continuously during each month.

a) Determine the lowest, constant production rate for the company, given that all demand must be met without shortcomings

b) How large will the average stock level be and how large will be the starting stock?

c) Evaluate the production plan produced and compare it with a plan, where the constant production rate is set at 800 units per month and where outsourcing is used when needed. The warehousing cost is SEK 50 per unit and period, while outsourcing costs SEK 100 per unit.

"production planning and finances"