A manufacturer of industrial seafood processing equipment (scaler) wants you to develop an aggregate plan for the six quarters of the upcoming year and a half using the following data on demand and capacity, along with cost numbers/per unit. Demand for 6 quarters are as follows Q1: 400, Q2: 850, Q3: 1,000, Q4: 450, Q5: 925, Q6: 1,100. Previous quarter's output was 500 units. Initial inventory is 250 units. Overtime capacity for the planning period is 200 units/quarter. The manufacture's subcontractor can supply 1000 units/quarter, if needed. Regular time cost is $7.50 /unit. Overtime costs $4.00 extra/unit. The subcontracting cost is $13.75 /unit. Carrying cost is $5.75 /unit/quarter. To increase staffing it's $35 /unit, and $50 /unit to decrease staffing. Stock-out cost is $8.55 per unit. No back-ordering is allowed. a. Produce utilizing a strategy that varies the workforce based on the prior quarter. This will be Plan A. What is the cost of the plan? Were any sales lost during the planning period? Note: Do not use the inventory right away; plan to just chase the prior quarter's demand. b. Produce utilizing a level strategy by producing at a rate of the 570 for the planning period. This will be Plan B. What is the cost of the plan? Was there a need to carry over inventory throughout the planning period? c. Produce utilizing a mixed strategy producing 350 units per quarter, then utilizing overtime and subcontracting, if needed. This will be Plan C. What is the cost of this plan? d. Based on cost, which plan should be selected? A manufacturer of industrial seafood processing equipment (scaler) wants you to develop an aggregate plan for the six quarters of the upcoming year and a half using the following data on demand and capacity, along with cost numbers/per unit. Demand for 6 quarters are as follows Q1: 400, Q2: 850, Q3: 1,000, Q4: 450, Q5: 925, Q6: 1,100. Previous quarter's output was 500 units. Initial inventory is 250 units. Overtime capacity for the planning period is 200 units/quarter. The manufacture's subcontractor can supply 1000 units/quarter, if needed. Regular time cost is $7.50 /unit. Overtime costs $4.00 extra/unit. The subcontracting cost is $13.75 /unit. Carrying cost is $5.75 /unit/quarter. To increase staffing it's $35 /unit, and $50 /unit to decrease staffing. Stock-out cost is $8.55 per unit. No back-ordering is allowed. a. Produce utilizing a strategy that varies the workforce based on the prior quarter. This will be Plan A. What is the cost of the plan? Were any sales lost during the planning period? Note: Do not use the inventory right away; plan to just chase the prior quarter's demand. b. Produce utilizing a level strategy by producing at a rate of the 570 for the planning period. This will be Plan B. What is the cost of the plan? Was there a need to carry over inventory throughout the planning period? c. Produce utilizing a mixed strategy producing 350 units per quarter, then utilizing overtime and subcontracting, if needed. This will be Plan C. What is the cost of this plan? d. Based on cost, which plan should be selected
