Exercise 5: Aggregate Production Planning Using Pure Strategies The Good and Rich Candy Company makes a variety of candies in three factories worldwide. Its line of chocolate candies exhibits a highly seasonal demand pattern, with peaks during the winter months (for the holiday season) and valleys during the summer months (when chocolate tends to melt and customers are watching their weight). Question: Given the following costs and quarterly sales forecasts, determine whether a level production or chase demand production strategy would more economically meet the demand for chocolate candies Demand 800 x Quarter Spring Summer Fall 500 x New Demand 7.200 4.500 10800 135.00 3.6.000 1200 x Winter 1500 x Total 4,000 Beg workforce 0 Beg inv. 0 Firing cost $60 x 9.540 Units/worker 100 Inventory cost $1.5 Hiring cost $30 x 9. 270 Level Production strategy: Quarter Demand Production Inventory Spring Summer Fall Winter Total * $1.5 Total cost of Level Production strategy S .... Chase Demand strategy: Workers Workers Workers Quarter Demand Production Needed Hired Fired Spring Summer Fall Winter Total XS....... .... X S....... Total cost of Chase Demand strategy S. Comparison of costs and Conclusion: strategy is better in this case because it gives the LOWER COST Exercise 5: Aggregate Production Planning Using Pure Strategies The Good and Rich Candy Company makes a variety of candies in three factories worldwide. Its line of chocolate candies exhibits a highly seasonal demand pattern, with peaks during the winter months (for the holiday season) and valleys during the summer months (when chocolate tends to melt and customers are watching their weight). Question: Given the following costs and quarterly sales forecasts, determine whether a level production or chase demand production strategy would more economically meet the demand for chocolate candies Demand 800 x Quarter Spring Summer Fall 500 x New Demand 7.200 4.500 10800 135.00 3.6.000 1200 x Winter 1500 x Total 4,000 Beg workforce 0 Beg inv. 0 Firing cost $60 x 9.540 Units/worker 100 Inventory cost $1.5 Hiring cost $30 x 9. 270 Level Production strategy: Quarter Demand Production Inventory Spring Summer Fall Winter Total * $1.5 Total cost of Level Production strategy S .... Chase Demand strategy: Workers Workers Workers Quarter Demand Production Needed Hired Fired Spring Summer Fall Winter Total XS....... .... X S....... Total cost of Chase Demand strategy S. Comparison of costs and Conclusion: strategy is better in this case because it gives the LOWER COST