Question
manufactures specialised high-tech products for a variety of customers including those in the aerospace, military, and medical industries. The operations manager at wants to prepare
manufactures specialised high-tech products for a variety of customers including those in the aerospace, military, and medical industries. The operations manager at wants to prepare an Aggregate production plan for the next six months using the following data: Production capacity is 15 units per day, but the company can produce 4 units more per day in overtime with an extra cost of $ 2,000 per unit. However, workers can be asked to work during this August holiday with an extra cost of $ 4,000 per unit. Since not all workers are willing to do it, the maximum production in August would be of 200 units. The initial inventory is 80 units, and the safety stock level equal to a third of next month demand (rounded to the immediate superior integer) is used for planning purposes. For the last month a minimum safety stock level of 68 units is desired. Inventory cost is $ 500 per unit per month. Required: (a) Using the information given above, prepare the Aggregate Production Plan: [25 marks] (b) How many units will be produced in overtime? Show quantities per month. [8 marks] (c) Will have to work on holidays? If yes, how many units will be produced? [5 marks] (d) Is there any month with unused capacity? If yes, name the month(s) and the unused capacity per month. [7 marks
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