Amade, Inc., is a global supplier of innovative Storage Area Network (SAN) products with corporate headquarters located in Fremont, California. It has led the industry in market firsts and continues to drive the Storage Area Network (SAN) edge market with innovative Fiber Channel switching technology. The company has consistently delivered a time to market advantage to major OEM (original equipment manufacturer) customers enabling them to create clear business value for their customer base. The company is in the process of developing a six-month aggregate plan for 2012. The demand forecast for the first six months of 2012 is presented below:

Correction: subcontracting cost should be $1150/unit, not 890

Questions (please provide your answer)

Using the aggregate planning templates, define and prepare FIVE alternative aggregate plans.

Explain what are the pros and cons of each aggregate plan.

Identify the aggregate plan you prefer the most and explain why.

Note: Please prepare Excel printout with each plans calculations and write-up describing your plans and solutions.

Amade Aggregate Planning (Continued) Jul 6950 te Planning In August Septemeber October November December Demand forecast 7900 8200 8350 7900 Costs Ma terials, $/unit Inventory holding cost, S/unit/m onth Cost of stockout, $/unit/m onth Cost of subcontra cting, S/unit/m on th Hiring and tra ining cost, Slem p Layoff cost, Slem p Labor hours required per unit (Lead tim e) Regular time cost, S/hour O ve rtim e cost per hour, S/hour In ven to ry Beginning inventory, units Safety stock (if applied), % of monthly demand Labor Initial number of em ployees W ork hours per day 1074.00 165.00 2855.00 890.00 840.00 1550.00 1.50 28.25 36.50 340.00 0.06 40 Other req uirem ents Available overtime, % of re g ular tim e Available subcontra ct per m onth in units, up to Backlog per m onth no m ore than, units 30 1000 100 Amade Aggregate Planning (Continued) Jul 6950 te Planning In August Septemeber October November December Demand forecast 7900 8200 8350 7900 Costs Ma terials, $/unit Inventory holding cost, S/unit/m onth Cost of stockout, $/unit/m onth Cost of subcontra cting, S/unit/m on th Hiring and tra ining cost, Slem p Layoff cost, Slem p Labor hours required per unit (Lead tim e) Regular time cost, S/hour O ve rtim e cost per hour, S/hour In ven to ry Beginning inventory, units Safety stock (if applied), % of monthly demand Labor Initial number of em ployees W ork hours per day 1074.00 165.00 2855.00 890.00 840.00 1550.00 1.50 28.25 36.50 340.00 0.06 40 Other req uirem ents Available overtime, % of re g ular tim e Available subcontra ct per m onth in units, up to Backlog per m onth no m ore than, units 30 1000 100