Reference: Input data for problems 1-4 follows:

Cost data

Regular time labor cost per hour $10

Overtime time labor cost per hour $15

Subcontracting cost per unit (labor only) $80

Back order cost per unit per period $20

Inventory holding cost per unit per period $10

Hiring cost per employee $500

Firing cost per employee $400

Capacity data

Beginning workforce 40 employees

Beginning inventory 0 units

Beginning back orders 0 units

Production standard per unit (hours) 2 hours of labor per unit

Regular time available per period (hours) 160 hours per period per employee

Overtime time available per period (hours) 30 hours per period per employee

Demand data

Period 1 3,920 units Period 5 3,800 units

Period 2 2,480 units Period 6 4,340 units

Period 3 2,200 units Period 7 4,820 units

Period 4 3,280 units Period 8 4,600 units

1.Develop a chase aggregate plan without inventory and back orders. Do no hiring or firing. When demand exceeds regular production, use overtime up to its maximum and then subcontracting. When demand is less than regular production, use undertime (data given above).

(a) What are the total hours of overtime per employee for the plan?

(b) How many total units are produced using subcontracting?

(c) What are the total hours of undertime per employee for the plan?

(d) What is the total cost?

(e) What is the cost per unit?

2.Develop a chase aggregate plan without inventory and back orders. Use no undertime or subcontracting. When demand exceeds regular plus maximum overtime production, hire enough employees to meet demand, working as much overtime as possible. When demand is less than regular time production, fire just enough workers to avoid undertime (you may then use a minimal amount of overtime to get production back up to demand) (data given above).

What is the workforce at the end of the last period?

How many total were hired? How many total were fired?

(b) How many total units were produced using overtime?

(c) What is the total cost?

(d) What is the cost per unit?

3.Develop a hybrid aggregate plan with inventory, but no back orders. Also, use no undertime and no subcontracting. Also use no firing, since the company is projecting a 20% annual growth rate per year over the next several years. When demand minus opening inventory exceeds regular plus maximum overtime production, hire enough employees to meet demand, working as much overtime as possible. When demand is less than regular time production, work no overtime and add to inventory (data given above).

What is the workforce at the end of the last period?

How many total were hired?

(b) How many total units were produced using overtime?

(c) What is the maximum ending inventory and when does it occur?

(d) What is the total cost?

(e) What is the cost per unit?

4.Given the following calculate (a) cost using a level production plan, (b) cost using a chase aggregate plan, and identify the lowest cost option. In the level production plan backorders are allowed but for each unfilled order it costs the company $10/unit. The employees work an 8 hour day and overtime is not allowed

	Demand
Period 1	240	Initial Employees	6
Period 2	235	Capacity/employee	40
Period 3	265	Hourly cost/employee	$18
Period 4	220	Inventory Holding	$20
Period 5	220	Shortage Cost	$10
Period 6	260	Hiring Cost	$230
		Firing Cost	$190

a) A=5834, B = 5472, C = level

b) A=5472, B = 5834, C = level

c) A=5834, B = 5472, C = chase

d) A=5472, B = 5834, C = chase

e) A =5834, B = 5472, C = either

5.Given the following data:

Usage per Lead Time

Item Parent (weeks)

J - 3

K 3 2

L 1 1

M 2 2

N 4 3

O 2 2

P 1 1

Q 6 2

6.The end product J is made from components K, L, and M. K is made from N and O. O is made from P and Q.

(a) What is the replenishment lead time for J, assuming there are no inventories?

(b) Calculate the gross requirements for each of the components if the company plans to build 10 of its J model. Assume that there are no beginning inventories.

(c) Calculate the gross requirements for each of the components if the company plans to build 10 of its J model if you have these beginning inventories: 60 N and 60 O.

(d) What is the replenishment lead time if the company plans to build 10 of its J model, assuming the beginning inventories given in (c) above?

Reference: Use the following data for questions 7 & 8

	Bill of Material				Lot Size Rule	Lead Time
	Door		2		FOQ = 10	2 weeks
		hinges	4		FOQ = 40	4 weeks
			screws (h)	24	FOQ = 50	1 week
		knobs	2		FOQ = 10	3 weeks
			screws (k)	4	FOQ = 25	1 week
	Stain	1			FOQ = 25	1 week
Week	1	2	3	4	5	6	7	8	9
Door Gross Requirements						6			10
Beginning Inventory	Door	hinges	screw (h)	knobs	screw (K)	Stain
	2	20	30	5	15	10

6.For the data provided determine the Inventory Record using a FOQ lot size rule for the hinge.

7.For the data provided determine the Inventory Record using a FOQ lot size rule for the screw (H).

8.Given the following data:

Run Time

Per unit in

Item Setup Time Standard

Number Period Quantity (Hours) Hours

KE738 3 400 3.6 0.45

KR376 4 550 2.7 0.25

KM276 4 800 1.6 0.70

KW718 5 200 4.0 0.15

KJ395 5 350 3.9 0.60

KA729 3 100 5.6 0.20

KP237 4 700 1.0 0.55

KF823 5 300 7.2 0.15

KH489 3 600 6.6 0.80

KE812 3 300 3.9 0.35

(a) What are the workloads for periods 3, 4, and 5?

(b) There are 168 hours of operating time per machine each period. How many machines should be operated for periods 3, 4, and 5?