MARK 486 Study Guide - Final Guide: Feasible Region
8 May 2015
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The sales person has developed the following aggregate forecasts for demand (in cases) for the next six months. Develop the minimum cost aggregate production plan using a level output/workforce plan, supplemented with each of the following variables, and compute the total cost for each plan. Which plan has the lower total cost: use overtime (up to 1,000 cases per month), use a combination of overtime (500 cases per month maximum) and part-time labour (500 cases per month maximum). Solution: we are 3000 units short, 1600 in aug and 1400 in sep. Produce the max. of 1000 units during overtime in aug. and sep. Because carrying cost is less than backorder cost, produce 1000 more units in jul. 100,000 ,400: we are 3000 units short, 1600 in aug and 1400 in sep. Hence, produce the max. of 500 units during overtime in aug and.
