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QUESTION TWO Sun Share Ltd. produces a variety of furniture products. The operations manager wants to prepare an aggregate plan for the next five months.
QUESTION TWO Sun Share Ltd. produces a variety of furniture products. The operations manager wants to prepare an aggregate plan for the next five months. Demand forecast as given below. Jan Feb Mar Apr May Jun Total Demand Forecast 1,800 1,500 1,100 900 1,100 1,600 8,000 Working Days 22 19 21 21 22 20 125 Cost of production per hour using regular time is $4.00, and using overtime it is $7.50. Cost of production per unit using subcontracting is $20.00. Inventory holding cost per unit per period is $1.50. Backorder cost per unit per period is $5.00. Hiring cost is $200.00 per worker. Firing cost is $250.00 per worker. Currently there are 50 workers and each can produce 0.2 units per hour. Beginning inventory is 400 units. Page 1 of 7 When computing number of workers needed, make sure you ONLY round the number up to a whole number if the number after the decimal point is equal to five or above. a) Develop an aggregate plan using a "chase strategy" and determine the cost. (15 MARKS) b) Develop an aggregate plan using a "level strategy" and determine the cost. (10 MARKS) [TOTAL: 25 MARKS]
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