Questions 1 through 4
Current Situation: Wes and Steve have begun to sell their bottled hot sauce to area markets. They have prepared a forecast of expected demand for the bottles for the next 6 periods as shown below. Given this information and the data re: capacities and costs, complete the 2 required aggregate plans on the next pages and answer the Qs shown. Period 1 2 4 5 6 Forecast 400 450 200 300 450 300 Maximum regular production = 300 units/period Maximum overtime = 40 units/period Maximum Subcontracting = 150/period Beginning inventory = 0 Ending inventory (in period 6) = 0 Regular time cost = $10 Overtime cost = $15 Sub-contract cost = $25 Inventory holding costs are $2/average unit/period Backorders cost of $20/unit/period Important Notes: . . You must write neatly and NOT in red ink. You are not permitted to cross out answers, use white-out or start over. If I cannot read your work, you will receive zero points. Round to 2 decimal points if necessary. CARRY THROUGH ERRORS COUNT and points will be deducted! Double check your work. 3 6 1 400 2 450 5 450 Total 2100 200 300 300 300 300 300 300 300 300 1800 120 Max 300 40 150 40 40 60 110 0 10 0 180 0 10 -100 0 100 200 LEVEL PLAN Period Forecast Output Regular Overtime Subcontract Output - Forecast Inventory Beginning Ending Average Backlog Costs: Output: Regular 10 Overtime Subcontract Inventory 2 Back orders 20 Total 100 100 200 01000 100 50 0 10,000 100 50 200 0 0 0 0 6 18000 1800 3000 3000 3000 3000 3000 3000 600 600 0 0 600 0 1500 2750 250 0 0 100 200 100 0 0 0 0 0 0 0 4500 400 0 51006350 3100 3200 3950 3000 24700 1 2 3 4 5 6 Total 400 450 200 300 450 300 2100 Max 300 300 200 300 300 300 300 40 1700 120 40 0 0 40 0 40 150 110 280 0 0 0 0 0 0 0 CHASE PLAN Period Forecast Output Regular Overtime Subcontract Output - Forecast Inventory Beginning Ending Average Backlog Costs: Output: Regular 10 Overtime 15 Subcontract 25 Inventory 2 Back orders 20 Total 0 1000 0 10000 OOOO 10,000 Oo oo 0 0 0 0 0 Oo 3000 3000 2000 3000 3000 3000 17000 600 600 0 600 0 1800 1500 2750 0 2750 0 7000 0 0 0 0 0 0 0 0 5100 6350 2000 3000 6350 3000 25800 CHASE PLAN (10 pts) Period 1 2 3 4 5 6 TOTAL Forecast 400 450 200 300 450 300 putput Regular Overtimel Subcontract) putput - Forecast Inventory Beginning Ending) Average Backlog Costs: putput: Regular Overtime Subcontract Inventory Back orders Total (1 pt) 1. Which plan is better from a cost standpoint? 2. Which plan is better for employees? Why? (1 pt) 3. For each plan, how would service/quality be jeopardized (be very brief with your response)? (2 pts) Level: Chase: 4. If demand was to increase over time, what SPECIFIC STRATEGY action must Wes and Steve undertake to ensure profitability, cost effectiveness and quality for their business? (FYI be specific when stating how; there is only one correct answer to this Q) (1 pt) Current Situation: Wes and Steve have begun to sell their bottled hot sauce to area markets. They have prepared a forecast of expected demand for the bottles for the next 6 periods as shown below. Given this information and the data re: capacities and costs, complete the 2 required aggregate plans on the next pages and answer the Qs shown. Period 1 2 4 5 6 Forecast 400 450 200 300 450 300 Maximum regular production = 300 units/period Maximum overtime = 40 units/period Maximum Subcontracting = 150/period Beginning inventory = 0 Ending inventory (in period 6) = 0 Regular time cost = $10 Overtime cost = $15 Sub-contract cost = $25 Inventory holding costs are $2/average unit/period Backorders cost of $20/unit/period Important Notes: . . You must write neatly and NOT in red ink. You are not permitted to cross out answers, use white-out or start over. If I cannot read your work, you will receive zero points. Round to 2 decimal points if necessary. CARRY THROUGH ERRORS COUNT and points will be deducted! Double check your work. 3 6 1 400 2 450 5 450 Total 2100 200 300 300 300 300 300 300 300 300 1800 120 Max 300 40 150 40 40 60 110 0 10 0 180 0 10 -100 0 100 200 LEVEL PLAN Period Forecast Output Regular Overtime Subcontract Output - Forecast Inventory Beginning Ending Average Backlog Costs: Output: Regular 10 Overtime Subcontract Inventory 2 Back orders 20 Total 100 100 200 01000 100 50 0 10,000 100 50 200 0 0 0 0 6 18000 1800 3000 3000 3000 3000 3000 3000 600 600 0 0 600 0 1500 2750 250 0 0 100 200 100 0 0 0 0 0 0 0 4500 400 0 51006350 3100 3200 3950 3000 24700 1 2 3 4 5 6 Total 400 450 200 300 450 300 2100 Max 300 300 200 300 300 300 300 40 1700 120 40 0 0 40 0 40 150 110 280 0 0 0 0 0 0 0 CHASE PLAN Period Forecast Output Regular Overtime Subcontract Output - Forecast Inventory Beginning Ending Average Backlog Costs: Output: Regular 10 Overtime 15 Subcontract 25 Inventory 2 Back orders 20 Total 0 1000 0 10000 OOOO 10,000 Oo oo 0 0 0 0 0 Oo 3000 3000 2000 3000 3000 3000 17000 600 600 0 600 0 1800 1500 2750 0 2750 0 7000 0 0 0 0 0 0 0 0 5100 6350 2000 3000 6350 3000 25800 CHASE PLAN (10 pts) Period 1 2 3 4 5 6 TOTAL Forecast 400 450 200 300 450 300 putput Regular Overtimel Subcontract) putput - Forecast Inventory Beginning Ending) Average Backlog Costs: putput: Regular Overtime Subcontract Inventory Back orders Total (1 pt) 1. Which plan is better from a cost standpoint? 2. Which plan is better for employees? Why? (1 pt) 3. For each plan, how would service/quality be jeopardized (be very brief with your response)? (2 pts) Level: Chase: 4. If demand was to increase over time, what SPECIFIC STRATEGY action must Wes and Steve undertake to ensure profitability, cost effectiveness and quality for their business? (FYI be specific when stating how; there is only one correct answer to this Q) (1 pt)
