Daniel, Director of Engins Verts, a manufacturer of lawn mowers and leaf blowers/vacuums. He must prepare an overall production plan according to the demand forecasts for engines (see the table below). 

 

Number of employees: 9 employees 

Production per day: 9 units per employee 

Regular production cost: $50 per unit 

Cost of subcontracting: $75 per unit 

Hiring cost: $3000 per employee

 Thank you cost: $6000 per employee 

Storage cost: $1 per unit per month (monthly inventory cost is calculated based on the month's ending inventory). Initial stocks: 300 units 

Safety stock: 10% of demand

 

It is assumed that:  employees work every day of the year (ie 365 days a year).  Back orders or shortages are not permitted.  The monthly inventory cost is calculated based on the ending inventory for the month.

 

 a) Develop a synchronous production strategy that respects the forecast and safety stock of each month, varying only the level of labor by variable duration contracts. Calculate the total cost of your synchronous plan. 

 

b) Compare costs to a level production plan that uses inventory and subcontracting to absorb fluctuations. Calculate the cost of your plan. 

 

Mois Janvier Fvrier Mars Avril Mai Juin Juillet Aot Prvision 500 300 200 1500 2500 3500 4500 2500 500 302 Novembre 301 Dcembre 2550 Septembre Octobre