Question
Product E is a new product and manufactured by the Alpha company itself. This product was introduced to the market in July 2020 and the
Product E is a new product and manufactured by the Alpha company itself. This product was introduced to the market in July 2020 and the feedback of the market was very positive. Mary had provided the 2020 historical sale data of product E in the attached file. She wanted Jason to determine the optimal production plan for the first 4 weeks of 2021 for product E. Some information is given here:
2020 last week's output =2,800
Beginning inventory = 0
Inventory holding cost = $40 per unit per week
Hiring employees = $40 per unit
Terminating employee = $80 per unit
Subcontracting cost =$60 per unit
Unit cost on regular time = $30 per unit
Overtime cost = $15 extra per unit
Jason's job is to develop an aggregate plan. The three initial options he wants to evaluate are:
a. Plan A: a chase strategy that hires and fires personnel as necessary to meet the forecast.
b. Plan B: a level strategy.
c. Plan C: a level strategy that produces 2,800 units per week and meets the forecast demand with inventory and subcontracting.
Which strategy Jason should choose to get the lowest expected cost?
Week of 2020 | Sales of Product E |
1 | N/A |
2 | N/A |
3 | N/A |
4 | N/A |
5 | N/A |
6 | N/A |
7 | N/A |
8 | N/A |
9 | N/A |
10 | N/A |
11 | N/A |
12 | N/A |
13 | N/A |
14 | N/A |
15 | N/A |
16 | N/A |
17 | N/A |
18 | N/A |
19 | N/A |
20 | N/A |
21 | N/A |
22 | N/A |
23 | N/A |
24 | N/A |
25 | N/A |
26 | N/A |
27 | 1544 |
28 | 1597 |
29 | 1661 |
30 | 1703 |
31 | 1746 |
32 | 1802 |
33 | 1850 |
34 | 1902 |
35 | 1950 |
36 | 2003 |
37 | 2043 |
38 | 2097 |
39 | 2160 |
40 | 2202 |
41 | 2246 |
42 | 2295 |
43 | 2349 |
44 | 2397 |
45 | 2450 |
46 | 2499 |
47 | 2550 |
48 | 2603 |
49 | 2648 |
50 | 2691 |
51 | 2754 |
52 | 2808 |
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