P301 - Problem 7 The owner of a small mill-working plant that builds cabinets is developing his aggregate plan for the next year. The relevant cost data and forecast for the next 4 quarters is provided below. The company currently has 20 employees and works one 8 hour shift each day with 2 paid 15 minute breaks. Assume each quarter has 63 working days, and that it currently has no units in stock. Use this information and the information from the table to answer the questions below. Other Data Labor Hours/Unit Beginning Inventory Costs Holding Cost/Unit/Quarter Hiring Cost Layoff Cost Subcontract Cost Avg. Labor Cost/Hour Overtime Labor Cost/Hour 3.75 10 Forecast 3100 1 4100 3650 2100 $75.00 $5,000.00 $6,000.00 $115.00 $18.65 $28.00 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Part 1 1) If the company used a chase demand startegy and rounded any fractional number of employees to the nearest whole number, how many employees would be used in each quarter? 2) If the company used a level capacity strategy and rounded any fractional number of employees to the nearest whole number, how Period 2 3 4 Forecast 3100 4100 3650 2100 Hours Reg. 13,950 18,450 16,425 9,450 Workers Req. 29.5 39.04 34.77 20 Part II Assume the company wants to use a Level Capacity Strategy with 24 employees (Round the Production in each period to the nearest whole number). In any period where on-hand inventory and production do not meet demand the company would supplement with overtime production. Use the table below to calculate the total costs associated with using this plan. Q3) What would the overtime production cost be for this plan? Q3) What would the Total Cost be for this plan? Level Capacity Aggregate Plan Period 1 2 3 4 Forecast 3100 4100 3650 2100 Workers Used 7 7 7 7 Hire (Fire) 22.00 32.00 27.00 13.00 Production 735 735 735 735 Production - Forecast Inventory: B.I. o E.I. O $0 $0 $0 $0 $0.00 Average Overtime Production Hiring Cost Firing Cost Reg. Output O.T. Subcontract Inventory Backorder Total Cost: $0.00 0.00 0.00 0.00 $0 0 Total Cost For Plan P301 - Problem 7 The owner of a small mill-working plant that builds cabinets is developing his aggregate plan for the next year. The relevant cost data and forecast for the next 4 quarters is provided below. The company currently has 20 employees and works one 8 hour shift each day with 2 paid 15 minute breaks. Assume each quarter has 63 working days, and that it currently has no units in stock. Use this information and the information from the table to answer the questions below. Other Data Labor Hours/Unit Beginning Inventory Costs Holding Cost/Unit/Quarter Hiring Cost Layoff Cost Subcontract Cost Avg. Labor Cost/Hour Overtime Labor Cost/Hour 3.75 10 Forecast 3100 1 4100 3650 2100 $75.00 $5,000.00 $6,000.00 $115.00 $18.65 $28.00 Qtr 1 Qtr 2 Qtr 3 Qtr 4 Part 1 1) If the company used a chase demand startegy and rounded any fractional number of employees to the nearest whole number, how many employees would be used in each quarter? 2) If the company used a level capacity strategy and rounded any fractional number of employees to the nearest whole number, how Period 2 3 4 Forecast 3100 4100 3650 2100 Hours Reg. 13,950 18,450 16,425 9,450 Workers Req. 29.5 39.04 34.77 20 Part II Assume the company wants to use a Level Capacity Strategy with 24 employees (Round the Production in each period to the nearest whole number). In any period where on-hand inventory and production do not meet demand the company would supplement with overtime production. Use the table below to calculate the total costs associated with using this plan. Q3) What would the overtime production cost be for this plan? Q3) What would the Total Cost be for this plan? Level Capacity Aggregate Plan Period 1 2 3 4 Forecast 3100 4100 3650 2100 Workers Used 7 7 7 7 Hire (Fire) 22.00 32.00 27.00 13.00 Production 735 735 735 735 Production - Forecast Inventory: B.I. o E.I. O $0 $0 $0 $0 $0.00 Average Overtime Production Hiring Cost Firing Cost Reg. Output O.T. Subcontract Inventory Backorder Total Cost: $0.00 0.00 0.00 0.00 $0 0 Total Cost For Plan
