1. For the following monthly demand forecast develop an aggregate plan when
2. 38 units per day is produced and unmet demand is backordered.
3. 38 units per day is produced and overtime is when needed.

Month	Demand	Production Days
1	1100	20
2	1500	22
3	1200	21
4	800	21
5	700	18
6	900	22

item	cost
Inventory carrying cost	$ 5 per unit per month
Subcontracting cost per unit	$20 per unit
Average pay rate	$10 /hr ($80 per day)
Overtime pay rate	$17/hr (above 8 hrs/day)
Labour-hours to produce a unit	1.6 hours per unit
Cost of increasing daily production rate (hiring and training)	$300 per unit
Cost of decreasing daily production rate (layoffs)	$600 per unit
Backorder	$10 per unit

2) A large Saskatchewan feed mill, B. Swart Processing, prepares its sixty-month aggregate plan by forecasting demand for 50-pound bags of cattle feed as follows: January, 1000 bags; February, 1200; March, 1250; April, 1450; May, 1400; and June, 1400. The feed mill plans to begin the new year with no inventory left over from the previous year, and backorders are not permitted. It projects that capacity (during regular hours) for producing bags of feed will remain constant at 800 until the end of April, and then increase to 1100 bags per month when a planned expansion is completed on May 1. Overtime capacity is set at 300 bags per month until the expansion, at which time it will increase to 400 bags per month. A friendly competitor in Alberta is also available as a backup source to meet demandbut can provide only 500 bags total during the six-month period.

Develop a six-month production plan for the feed mill using the transportation method.

Cost data are as follows:

Regular-time cost per bag (until April 30) $12.00

Regular-time cost per bag (after May 1) $11.00

Overtime cost per bag (during entire period) $16.00

Cost of outside purchase per bag $18.50

Carrying cost per bag per month $ 1.00

3) WestJets daily flight from Edmonton to Toronto uses a Boeing 737, with all-coach seating for 120 people. In the past, the airline has priced every seat at $140 for the one-way flight. An average of 80 passengers are on each flight. The variable cost of a filled seat is $25. Katie Morgan, the new operations manager, has decided to try a yield-revenue approach, with seats priced at $80 for early bookings and at $190 for bookings within one week of the flight. She estimates that the airline will sell 65 seats at the lower price and 35 at the higher price. Variable cost will not change. Which approach is preferable to Ms. Morgan?

4) The demand for subassembly S is 100 units in week 7. Each unit of S requires 1 unit of T and 2 units of U. Each unit of T requires 1 unit of V, 2 units of W, and 1 unit of X. Finally, each unit of U requires 2 units of Y and 3 units of Z. One firm manufactures all items. It takes 2 weeks to make S, 1 week to make T, 2 weeks to make U, 2 weeks to make V, 3 weeks to make W, 1 week to make X, 2 weeks to make Y, and 1 week to make Z. Construct a net material requirements plan using the following on-hand inventory.

5) Develop a lot-for-lot solution and calculate total relevant costs for the data in the following table.

Period	1	2	3	4	5	6	7	8	9	10	11	12
Gross requirements	30		40		30	70	20		10	80		50

Holding cost =$2.50/unit/week Holding cost =$2.50/unit/week; setup cost =$150setup cost =$15 0; lead time =1 week lead time =1 week; beginning inventory =40beginning inventory =40.

6) Develop a POQ solution and calculate total relevant costs for the data in the following table.

Period	1	2	3	4	5	6	7	8	9	10	11	12
Gross requirements	30		40		30	70	20		10	80		50

Holding cost =$2.50/unit/week Holding cost =$2.50/unit/week; setup cost =$150setup cost =$15 0; lead time =1 week lead time =1 week; beginning inventory =40beginning inventory =40.