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Planners for a company that makes several models of garden tractors are about to prepare an aggregate production plan that will cover the next
Planners for a company that makes several models of garden tractors are about to prepare an aggregate production plan that will cover the next six months. They have assembled the following information: Month Forecast demand 2,000 2,000 Permanent workforce -140 3,000 6 Total 4,000 5,000 2,000 18,000 Production per month 2,800 units or 20 per worker Initial inventory -1,000 units Desired ending inventory at the end of 6th month 1,000 units Costs Output Regular time permanent $100 per tractor Overtime $150 per tractor Temporary $100 per tractor employment) Hire cost $500 per temporary worker or $25 (-$500/20 units) per unit (charged to the first month of Inventory $10 per tractor per month (charged on the average inventory level) Backorder $150 per tractor per month They now want to evaluate a plan that calls for level output/workforce (with the current level of permanent workforce, 140), using Inventory to absorb the uneven demand but allowing some backorder. They a hand in the on Month Forecast Output Regular Temporary Overtine Output Inventory Beginning Ending Average Backorder Costs: Output Regular $100 Temporary $100 Overtime $150 Hire temporary @$25 Inventory $10 Back order @$150 Total Total 2,000 2,000 3,000 4,000 5,000 2,000 18,00
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