Level production strategy

The Westerbeck Company manufactures several models of

automatic washers and dryers. The projected requirements over

the next year for their washers follow.

Current inventory is 100 units. Current capacity (no undertime

or overtime) is 960 units per month. The average salary of

production

workers is

$2,500 per month.

Material costs

$120/unit. Each production worker accounts for 35 units per

month. Overtime is paid at time and a half. Any increase or

decrease in the production rate costs $60/unit for tooling, setup,

and line changes. This does not apply, however, to overtime.

Inventory-holding costs are $50 per unit per month. Lost sales

are valued at $325 per unit.

Level Demand Chase Demand

Production Costs

Lost Sales Costs

Overtime Costs

Undertime Costs

Total Costs

Total Units Produced (year)

Units remaining in inventory

as of Dec.

Aggregate Planning - Level Production Strategy Enter the data only in the yellow cells. Production cost (S/unit) Inventory holding cost (S/unit) Lost sales cost (S/unit) Overtime cost (S/unit) Undertime cost (S/unit) Rate change cost (S/unit) Normal production rate (units) Ending inventory (previous Dec.) Month January February March April May June July August September October November December Average Month January February March April May June July August September October November December Totals Total cost Demand Production Cost 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Cumulative Demand 0 0 0 0 0 0 0 0 0 0 0 Inventory Cost 0 0 0 0 0 0 0 0 0 0 0 01 0 Production 0 0 0 0 0 0 01 0 0 0 01 Lost Sales Cost 0 0 0 0 0 0 0 01 0 0 0 0 0 Cumulative Product Availability 0 0 0 0 0 0 0 0 0 0 0 Overtime Cost 0 0 0 0 0 0 0 0 Maximum 0 0 0 0 0 Ending Inventory 0 0 0 0 0 0 0 0 0 0 0 0 Undertime Cost 0 0 0 0 0 0 0 0 0 0 0 0 0 Lost Sales 0 0 0 0 0 0 0 0 0 0 0 0 Rate Change Cost 0 ol 0 0 0 0 0 0 0 0 o 0 Month J J J A SON D F MAM Requirement 800 1,030 810 900 950 1,340 1,100 1,210 600 580 890 1,000 Aggregate Planning - Level Production Strategy Enter the data only in the yellow cells. Production cost (S/unit) Inventory holding cost (S/unit) Lost sales cost (S/unit) Overtime cost (S/unit) Undertime cost (S/unit) Rate change cost (S/unit) Normal production rate (units) Ending inventory (previous Dec.) Month January February March April May June July August September October November December Average Month January February March April May June July August September October November December Totals Total cost Demand Production Cost 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Cumulative Demand 0 0 0 0 0 0 0 0 0 0 0 Inventory Cost 0 0 0 0 0 0 0 0 0 0 0 01 0 Production 0 0 0 0 0 0 01 0 0 0 01 Lost Sales Cost 0 0 0 0 0 0 0 01 0 0 0 0 0 Cumulative Product Availability 0 0 0 0 0 0 0 0 0 0 0 Overtime Cost 0 0 0 0 0 0 0 0 Maximum 0 0 0 0 0 Ending Inventory 0 0 0 0 0 0 0 0 0 0 0 0 Undertime Cost 0 0 0 0 0 0 0 0 0 0 0 0 0 Lost Sales 0 0 0 0 0 0 0 0 0 0 0 0 Rate Change Cost 0 ol 0 0 0 0 0 0 0 0 o 0 Month J J J A SON D F MAM Requirement 800 1,030 810 900 950 1,340 1,100 1,210 600 580 890 1,000