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Problem On Aggregate Planning

The document describes an aggregate planning problem for a skateboard company over 6 periods. It provides forecasted demand, production costs, inventory carrying costs, and backorder costs. It then presents a solution for a steady output plan of 200 skateboards per period with no overtime or subcontracting. The total cost of this plan is calculated to be 57,000 taka. The second problem provides a 9 period forecast for another company and considers hiring additional temporary workers to meet seasonal demand peaks. The proposed plan's total cost, including production, inventory, and backorder costs is calculated to be 12,828 taka.

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Kazi Shafiqul Azam
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© Attribution Non-Commercial (BY-NC)
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Download as DOC, PDF, TXT or read online on Scribd
787 views

Problem On Aggregate Planning

The document describes an aggregate planning problem for a skateboard company over 6 periods. It provides forecasted demand, production costs, inventory carrying costs, and backorder costs. It then presents a solution for a steady output plan of 200 skateboards per period with no overtime or subcontracting. The total cost of this plan is calculated to be 57,000 taka. The second problem provides a 9 period forecast for another company and considers hiring additional temporary workers to meet seasonal demand peaks. The proposed plan's total cost, including production, inventory, and backorder costs is calculated to be 12,828 taka.

Uploaded by

Kazi Shafiqul Azam
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Problem on Aggregate Planning

Problem-1: Planners for a company that makes several models of skateboard models are about to prepare the aggregate plan that will cover six periods. they have assembled the following: Period Forecast 1 2$$ 2 2$$ $$ ! !$$ " "$$ # 2$$ Total 1%$$

&osts: 'utput (egular time ) *k. 2+skateboard ,ubcontract ) *k. #+skateboard

'vertime ) *k. +skateboard -nventory ) *k. 1+skateboard per period on average inventory .ackorders ) tk. "+skateboard per period. *hey now want to evaluate a plan that calls for a steady rate of regular time output/ mainly using inventory to absorb the uneven demand but allowing some backlog. 'vertime and subcontracting are not used because they out steady output. *hey intend to start with 0ero inventory on hand in the first period. Prepare an aggregate plan and determine its cost using the information given above. Assume a level output of $$ units 1skateboards2 per period with regular time 1i.e./ 1%$$+# ) $$2 3ote that the planned ending inventory is 0ero. *here are 1" workers and each can produce 2$ skateboards per period. ,olution: Period 4orecast 'utput: (egular 'vertime ,ubcontract 'utput-forecast -nventory: .eginning 5nding Average .acklog 1 2$$ $$ 1$$ $ 1$$ "$ $ 2 2$$ $$ 1$$ 1$$ 2$$ 1"$ $ $ 2$$ 2$$ 2$$ $ $$ $$ ! !$$ " "$$ # 2$$ *otal 1/%$$ 1/%$$ $

$$ $$ $$ 11$$2 12$$2 1$$ 2$$ 1$$ 1"$ $ 1$$ $ "$ 1$$ $ $ $ $

#$$ 1$$

P+2

Period &ost:1*aka2 'utput: (egular 'vertime ,ubcontract 6ire+layoff -nventory1average2 .ackorders *otal

"

*otal

#$$ $ #"$

#$$ "$ $ 7"$

#$$ 1"$ $ %$$

#$$ 2$$ $ 7"$

#$$ 1"$ "$$ 11"$

#$$ "$ $ #$$

#$$

#$$ "$$ !7$$

3ote: *he total regular time output of 1%$$ units e8uals the total expected demand. Problem 2: A manager is attempting to put together an aggregate plan for the coming nine months. ,he has obtained a forecast of expected demand for the planning hori0on. *he plan must deal with highly seasonal demand9 demand is relatively high in periods and ! and again in period %/ as can be seen from the following forecasts: Period 4orecast 1 1:$ 2 2 $ ! 2%$ " 21$ # 17$ 7 1#$ % 2#$ : 1%$ *otal 1:!$

2#$

*he department now has 2$ full-time employees/ each of whom can produce 1$ units of output per period at a cost of tk. # per unit. -nventory carrying cost is tk. " per unit per period and backlog cost is tk. 1$ per unit per period. *he manager is considering a plan that would involve hiring two people to start working in period 1/ one on a temporary basis who would work only through period ". this would cost tk. "$$ in addition to unit production costs. a. ;hat is the rationale for this plan< b. =etermine the total cost of the plan/ including production/ inventory and back order costs. ,olution:

a. ;ith the current workforce of 2$ people each producing 1$ units per period/ regular capacity is 1%$$ units. *hat is 1!$ units less than expected demand. Adding one worker would increase regular capacity to 1%$$ > :$ ) 1%:$ units. *hat would still be "$ units short/ or ?ust the amount one temporary worker could produce in five periods. ,ince one of the two seasonal peaks is 8uite early/ it would make sense to start the temporary worker right away to avoid some of the back order cost. b. *he production plan for this strategy is as follows:

Period 4orecast 'utput: (egular 'utput-fore -nventory .eginning 5nding Average .acklog &osts: 1*k2 'utput (egular -nventory .ackorder *otal

1 1:$ 22$ $ $ $ 1" $

2 2 $ 22$ 11$2 $ 2$ 2" $

2#$ 22$ 1!$2 2$ $ 1$ 2$

! 2%$ 22$ 1#$2 $ $ $ %$

" 21$ 22$ 1$ $ $ $ 7$

# 17$ 21$ !$ $ $ $ $

7 1#$ 21$ "$ $ 2$ 1$ $

% 2#$ 21$ 1"$2 2$ $ 1$ $

: 1%$ 21$ $ $ $ $ $

*otal 1:!$ 1:!$ $

7$ 2 $

1 2$ 7" $ 1 :"

1 2$ 12" $ 1!!"

1 2$ "$ 2$$ 1"7$

1 2$ $ %$$ 212$

1 2$ $ 7$$ 2$2$

12#$ $ $$ 1"#$

12#$ "$ $ 1 1$

12#$ "$ $$ 1#1$

12#$ $ $ 12#$

11#!$ "$ 2 $$ 1!2:$

*he total cost for this plan is 1!2:$ taka/ plus the "$$ taka cost for hiring and fot the layoff/ giving a total of 1!7:$.

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