Question
Eagle Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters. Regular capacity production is equal to 1200 units at
Eagle Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters. Regular capacity production is equal to 1200 units at the beginning of Quarter 1 and must be at the same level at the end of Quarter 4. Quarter Demand Beginning inventory 0 units 1 1300 Backorder costs $55 per unit 2 1400 Inventory holding cost $4 per unit at end of quarter 3 1500 Hiring workers $8 per unit 4 1300 Laying off workers $16 per unit Regular Unit cost $30 per unit Overtime $40 per unit Part time $50 per unit Which of the following production plans (plan A and plan B below) is better? Plan A (4 pts) o Pure level strategy at the rate of the average quarterly demand, o Allow varying inventory, o Allow Backorders. o Overtime and part-time not allowed. Plan B (6 pts) o Pure level strategy at the rate of 1200. o Allow varying inventory, o Allow Backorders. o Overtime allowed up to a maximum of 150 units per quarter. o Part-time allowed up to a maximum of 50 units per quarter. Perform your aggregate planning calculations in the Tables provided in the next pages
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started