Individual Assignment | Week -3
Q1. Shoney Video Concepts produces a line of video streaming servers that are linked to computers for storing movies. These devices
have very fast access and large storage capacity.Shoney is trying to determine a production plan for the next 12 months. The main
criterion for this plan is that the employment level is to be held constant over the period. Shoney is continuing in its R&D efforts to
develop new applications and prefers not to prompt any adverse feelings from the local workforce. For the same reason, all employees
should put in full workweeks, even if that is not the lowest-cost alternative. The demand forecast for servers for the next 12 months is
Manufacturing cost is $200 per server, equally divided between materials and labour. Inventory storage cost is $5 per month. A
shortage of server’s results in lost sales and is estimated to cost an overall $20 per unit short. The inventory on-hand at the beginning of
the planning period is 200 units. Ten labour hours are required per DVD player. The workday is eight hours.
Develop an aggregate production schedule for the year using a constant workforce. For simplicity, assume 22 working days each month
except July, when the plant closes down for three weeks’ vacation (leaving seven working days). Assume that total production capacity
is greater than or equal to total demand.
Q2. Develop a production schedule to produce the exact production requirements by varying the workforce size for the following
problem. Use the example in the chapter
as a guide (Plan 1).The monthly
forecasts for product X for January,
February, and March are 1,000, 1,500
and 1,200, respectively. Safety stock
policy recommends that half of the
forecast for the month be defined as
safety stock. There are 22 working days
in January, 19 days in February, and 21
I March. Beginning inventory is 500
units. Manufacturing cost is $200 per
unit, storage cost is $3 per unit per
month, standard pay rate is $6 per
month, marginal cost of subcontracting
is $10 per unit, hiring and cost is $200
per worker, layoff cost is $300 per
worker, and work productivity is 0.1
unit per hour. Assume that you start off
with 50 workers and that they work 8
hours per day.
Q3. Helter Industries, a company that
produces a line of women’s bathing
suits, hires temporaries to help produce
its summer product demand. For the
current four-month rolling schedule,
there are three temps on staff and 12 full-time employees. The temps can be hired when needed and can be used as needed, whereas the
full time employees must be paid whether they are needed or not. Each full-time employee can produce 205 units, while each part-time
employee can produce 165 units per month.
Demand for bathing suits for the next four months is as follows:
May June July August
3,200 2,800 3,100 3,000
Beginning inventory in May is 403 bathing suits. Bathing suits cost $40 to produce and carrying cost is 24 percent per year.
Develop an aggregate plan that uses the 12 full-time employees each month and a minimum number of temporary employees. Assume
that all employees will produce at their full potential each month. Calculate the inventory carrying cost associated with your plan using
planned end-of-month levels.
NOTE: SEE EXCEL FILE TO SEE HOW I WAS ABLE TO OBTAIN THESE RESULTS.
