Nama : I Made wiratha Nungrat

NIM : 13209057
Homework 3
Problem 3.5 A Large manufacturer of household consumer goods is considering integrating an
aggregate planning model into its manufacturing strategy. Two of the company vice presidents
disagree strongly as to the value of the approach. What arguments might each of the vice presidents
use to support his or her point of view?
Answer:
- First possible argument is Aggregate planning always assumed that forecast demand in the
future is perfect. This mean that it depends strongly on availability of forecast demand
which is has possibility of error of sometime in the future. Forecast demand itself actually
wrong because demand in the future is impossible to measure exactly, which is turns out to
be some margin of error.

- Second possible argument is implementation of aggregate planning need extra careful
calculation otherwise the firm can lose a lot of money and has several problem which are
could bring some devastating effect to the firm or company such as Smoothing cost: The
cost of changing production and workforce. Changing the workforce mean that the firm
needs to fire or hire labor frequently to meet the demand and production plan. Firing and
hiring labor is not easy that it look because it need extra cost for interviewing and train new
labor and cost for laid off labor.
Problem 3.9 Small farm in the Salinas Valley grows apricots. The manager estimates that sales over
the next five years will be as follows:

Figure 1. Table of forecasts

Given :
- Current workers = 3
- Current Inventory (end of December) = 20.000 packages
- Each worker is paid $ 25.000/30.000 package/year
- Inventory Cost = 4 cent/package/year
- Cost of Hiring = $ 500
- Cost of Firing = $ 1.000

Year Forecasts demand
1 300000
2 120000
3 200000
4 110000
5 135000
a. Assuming shortage are not allowed, determine the minimum constant workforce that he will
need over the next five years.
Answer:

Note :
Year 1 demand forecast is 300.000, but the end of current year inventory is 20.000 packages.
The minimum constant workforce that he needed for next five years is 7 workers.
b. Evaluate The cost of plan found in part a
Answer:

Because the worker at the end of current year is 3, he needed only 4 more workers.
Total cost:
- Cost of Hiring = 4 x 500
= $ 2.000
-
= $ 11.800
- Total Cost = 11.800 + 2.000
= $ 13.800

If we use Zero Inventory Method,


Year Forecasts demand Net Cumulative demand Cum. # of unit produced per worker Ratio C/D Rounding
1 300000 300000 30000 10 10
2 120000 420000 60000 7 7
3 200000 620000 90000 6,888888889 7
4 110000 730000 120000 6,083333333 7
5 135000 865000 150000 5,766666667 7
Year # of unit produced per Worker Yearly Production Cumulative Production Cumulative Net Demand Ending Inventory
1 30000 210000 210000 300000 -90000
2 30000 210000 420000 400000 20000
3 30000 210000 630000 600000 30000
4 30000 210000 840000 710000 130000
5 30000 210000 1050000 845000 205000
295000
Year Forecasts demand Cumulative Net Dmand # of workers required Rounding
1 280000 280000 9,333333333 10
2 120000 400000 4 4
3 200000 600000 6,666666667 7
4 110000 710000 3,666666667 4
5 135000 845000 4,5 5


Total cost:
- Cost of Hiring = 11 x $ 500
= $ 5.500
- Cost of Firing = 9 x $ 1.000
= $ 9.000
- Cost of Inventory = 165.000 x $ 0,04
= $ 6.600
Total = 5.500 + 9.000 + 6.600 = $ 21.100
For this problem, Constant workforce plan give us a better solution.

Problem 3.11 An Implicit assumption made in Problem 9 was that dried apricots unsold at the end
of a year could be sold in subsequent years. Suppose that apricots unsold at the end of any year
must be discarded. Assume that a disposal cost of $ 0,20 per package.

Answer:
If we still using Constant Workforce Plan, the result is still same and fails to predict the cost
a. Minimum constant workforce
Answer :
We still need 7 Workers

b. Total Cost

Total cost is becoming 13.800 + 77.000 = $ 90.800




Year # Workers # Hired # Fired # of units per worker #unit produced Cum. production Cum. demand Ending Inventory
1 10 7 30000 300000 300000 280000 20000
2 4 6 30000 120000 420000 400000 20000
3 7 3 30000 210000 630000 600000 30000
4 4 3 30000 120000 750000 710000 40000
5 5 1 30000 150000 900000 845000 55000
11 9 165000
Year # of unit produced per Worker Yearly Production Cumulative Production Cumulative Net Demand Ending Inventory
1 30000 210000 210000 300000 -90000
2 30000 210000 420000 400000 20000
3 30000 210000 630000 600000 30000
4 30000 210000 840000 710000 130000
5 30000 210000 1050000 845000 205000
295000
Problem 3.14 Table of demand forecasting for a semiconductor company


Answer :

- Current workers = 675
- Current Inventory (end of December) = $ 120.000
- Nexxt Inventory = $ 100.000
- K = $ 60.000/year = $ 240 day/worker
- Inventory Cost = 25% annual interest rate charge
- Cost of Hiring = $ 200
- Cost of Firing = $ 400

a. Minimum constant workforce is 673 workers

This is the cheapest scenario for next year production portofolio which is need 673
workers

b. Total cost of plan
- Cost of firing = 675-673 = 2 workers
= 2 x 400 = $ 800
Month Production Days Predicted Demand($ 10.000)
January 22 340
February 16 380
March 21 220
April 19 100
May 23 490
June 20 625
July 24 375
August 12 310
September 19 175
October 22 145
November 20 120
December 16 165
Month # of dollars per worker Monthly Production Cum. Production Cum. Net Demand Ending Inventory
January 5280 3553440 3553440 3280000 273440
February 3840 2584320 6137760 7080000 -942240
March 5040 3391920 9529680 9280000 249680
April 4560 3068880 12598560 10280000 2318560
May 5520 3714960 16313520 15180000 1133520
June 4800 3230400 19543920 21430000 -1886080
July 5760 3876480 23420400 25180000 -1759600
August 2880 1938240 25358640 28280000 -2921360
September 4560 3068880 28427520 30030000 -1602480
October 5280 3553440 31980960 31480000 500960
November 4800 3230400 35211360 32680000 2531360
December 3840 2584320 37795680 35330000 2465680
361440
- Cost of Inventory = 361.440 + 100.000
= 461.440 X 25% (annual interest charge) = 115.360
Total Cost = 115.360 + 800 = $ 116.160

Problem 3.16 Graph the cumulative net demand

Answer:



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5000000
10000000
15000000
20000000
25000000
30000000
35000000
40000000
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Cum. Net Demand