1,000 Quarter (Week Numbers)

1st (1-13) 2nd (14-26) 3rd (27-39) 4th (40-52) 1st (Next Year) Notes
Forecast Demand 2,000 2,200 2,500 2,650 2,200 Each number is a 13 week forecast.
Ending Inventory Target 338 385 408 338 This is calculated based on 6 weeks of
future forecast demand.
Planning Data Numbers Units of measure Notes
Initial number of employees 60 employees
Emplyees per line 6
Forecast Demand by Quarter (1,000 Case Units)
Standard production rate (each line) 450 Cases per hour
Employee pay rate $20.00 per hour
3,000
Overtime pay rate $30.00 per hour
2,500
Standard hours per shift 7.5 hours
2,000
Maximum overtime per day 2 hours 1,500
Inventory carry cost $ 1.00 per case (per year) 1,000
Stockout cost $2.40 per case 500 Profit margin loss
Employee hiring and training cost $5,000.00 per employee 0
Employee layoff cost $3,000.00 per employee 1st (1-13) 2nd (14-26) 3rd (27-39) 4th (40-52) 1st (Next Year)

Aggregate Plan Quarter (Week Numbers)

1st (1-13) 2nd (14-26) 3rd (27-39) 4th (40-52) Notes
Lines run 10 8 9 11 Construct solution here.
Overtime hours per day 1 1 2 1 65 working days for 13 weeks
160
Beginning Inventory 200.0 686.3 475.3 476.1 Chase strategy would work best due to unstable demand forcest
Production 2,486.3 1,989.0 2,500.9 2,734.9 eventhough this case shows how campany hires and layoffs
Expected Demand 2,000.0 2,200.0 2,500.0 2,650.0
Ending Inventory 686.3 475.3 476.1 561.0 YOUR PRIMARY GOAL IS TO DETERMINE A COST EFFECTIVE PRODUCTION PLAN TO MEET THE DEM
THIS SECTION REPRESENTS AN OPERATIONS BUDGET (THAT YOU PREPARE IN ADVANCE OF ACTU
Deviation from Inventory Target 347.8 90.6 68.4 222.5 IN THE REAL WORLD, YOU WILL BE EVALUATED ON HOW WELL YOU ADHERE TO YOUR BUDGET
Employees 60 48 54 66 THE SIMULATION AND ACTUAL COSTS WORKSHEETS WILL LET YOU SIMULATE WHAT WILL HAPPEN

Cost of Plan 4
Labor Regular Time $624,000 $499,200 $561,600 $686,400 Employees are paid for 8 hrs work per day.
Labor Overtime $117,000 $93,600 $210,600 $128,700
Hiring and Training $0 $0 $30,000 $60,000 60 employees are employeed currently.
Layoff $0 $36,000 $0 $0
Inventory Carry Cost $686 $475 $476 $561 Carrying cost per year,divided by 4, multiplied by 1,000.
Stockout Cost $480 $1,647 $1,141 $1,143 Basic on negative deviation from target.
Quarter Budget $742,166 $630,922 $803,817 $876,804

Total Cost of Plan $3,053,709

Simulation Worksheet
day
s
per

wee employees cases

5 k 7.5 per shift 6 workers per line 6 per line 7.5 hr/per case 450 per hour
Overtime Expected Expected
Lines Beginning Scheduled Actual Production Actual Demand Actual Actual Ending
Qtr Wk Scheduled
Scheduled
Inventory Production
Forecast Demand Ending Weeks-of-
Rate (cases/hour) (1,000 Cases) Production Inventory
(hours) Inventory Supply
1 10 1 200.0 191.3 153.8 237.4 1.5 340.00 154 144.5 190.7
2 10 1 190.7 191.3 153.8 228.1 1.5 340.00 154 144.5 181.3
3 10 1 181.3 191.3 153.8 218.7 1.4 340.00 154 144.5 172.0
4 10 1 172.0 191.3 153.8 209.4 1.4 340.00 154 144.5 162.6
5 10 1 162.6 191.3 153.8 200.0 1.3 340.00 154 144.5 153.3
6 10 1 153.3 191.3 153.8 190.7 1.2 340.00 154 144.5 143.9
1st 7 10 1 143.9 191.3 153.8 181.3 1.2 340.00 154 144.5 134.6
8 10 1 134.6 191.3 153.8 172.0 1.1 340.00 154 144.5 125.2
9 10 1 125.2 191.3 153.8 162.6 1.0 340.00 154 144.5 115.9
10 10 1 115.9 191.3 153.8 153.3 0.9 340.00 154 144.5 106.5
11 10 1 106.5 191.3 153.8 143.9 0.9 340.00 154 144.5 97.2
12 10 1 97.2 191.3 153.8 134.6 0.8 340.00 154 144.5 87.8
13 10 1 87.8 191.3 153.8 125.3 0.7 340.00 154 144.5 78.5
14 8 1 78.5 153.0 169.2 62.3 0.4 272.00 169 92.5 1.7
15 8 1 1.7 153.0 169.2 -14.5 -0.1 272.00 169 92.5 -75.0
16 8 1 -75.0 153.0 169.2 -91.2 -0.5 272.00 169 92.5 -151.8
17 8 1 -151.8 153.0 169.2 -168.0 -1.0 272.00 169 92.5 -228.5
18 8 1 -228.5 153.0 169.2 -244.7 -1.4 272.00 169 92.5 -305.3
19 8 1 -305.3 153.0 169.2 -321.5 -1.9 272.00 169 92.5 -382.0
2nd 20 8 1 -382.0 153.0 169.2 -398.2 -2.4 272.00 169 92.5 -458.8
21 8 1 -458.8 153.0 169.2 -475.0 -2.7 272.00 169 92.5 -535.5
22 8 1 -535.5 153.0 169.2 -551.7 -3.1 272.00 169 92.5 -612.3
23 8 1 -612.3 153.0 169.2 -628.5 -3.5 272.00 169 92.5 -689.0
24 8 1 -689.0 153.0 169.2 -705.2 -3.8 272.00 169 92.5 -765.8
25 8 1 -765.8 153.0 169.2 -782.0 -4.1 272.00 169 92.5 -842.5
26 8 1 -842.5 153.0 169.2 -858.7 -4.5 272.00 169 92.5 -919.3
27 9 2 -919.3 192.4 192.3 -919.2 -4.8 342.00 192 146.2 -965.4
28 9 2 -965.4 192.4 192.3 -965.3 -5.0 342.00 192 146.2 -1,011.5
29 9 2 -1,011.5 192.4 192.3 -1,011.4 -5.3 342.00 192 146.2 -1,057.6
30 9 2 -1,057.6 192.4 192.3 -1,057.5 -5.5 342.00 192 146.2 -1,103.7
31 9 2 -1,103.7 192.4 192.3 -1,103.6 -5.7 342.00 192 146.2 -1,149.8
32 9 2 -1,149.8 192.4 192.3 -1,149.7 -6.0 342.00 192 146.2 -1,195.9
3rd 33 9 2 -1,195.9 192.4 192.3 -1,195.8 -6.2 342.00 192 146.2 -1,242.0
34 9 2 -1,242.0 192.4 192.3 -1,241.9 -6.4 342.00 192 146.2 -1,288.1
35 9 2 -1,288.1 192.4 192.3 -1,288.0 -6.6 342.00 192 146.2 -1,334.2
36 9 2 -1,334.2 192.4 192.3 -1,334.1 -6.7 342.00 192 146.2 -1,380.3
37 9 2 -1,380.3 192.4 192.3 -1,380.2 -6.9 342.00 192 146.2 -1,426.4
38 9 2 -1,426.4 192.4 192.3 -1,426.3 -7.1 342.00 192 146.2 -1,472.5
39 9 2 -1,472.5 192.4 192.3 -1,472.4 -7.2 342.00 192 146.2 -1,518.6
40 11 1 -1,518.6 210.4 203.8 -1,512.1 -7.4 374.00 204 174.8 -1,547.6
41 11 1 -1,547.6 210.4 203.8 -1,541.1 -7.6 374.00 204 174.8 -1,576.6
42 11 1 -1,576.6 210.4 203.8 -1,570.1 -7.7 374.00 204 174.8 -1,605.6
43 11 1 -1,605.6 210.4 203.8 -1,599.1 -7.8 374.00 204 174.8 -1,634.6
44 11 1 -1,634.6 210.4 203.8 -1,628.1 -8.0 374.00 204 174.8 -1,663.6
45 11 1 -1,663.6 210.4 203.8 -1,657.1 -8.1 374.00 204 174.8 -1,692.6
4th 46 11 1 -1,692.6 210.4 203.8 -1,686.1 -8.3 374.00 204 174.8 -1,721.6
47 11 1 -1,721.6 210.4 203.8 -1,715.1 -8.7 374.00 204 174.8 -1,750.6
48 11 1 -1,750.6 210.4 203.8 -1,744.1 -9.1 374.00 204 174.8 -1,779.6
49 11 1 -1,779.6 210.4 203.8 -1,773.1 -9.5 374.00 204 174.8 -1,808.6
50 11 1 -1,808.6 210.4 203.8 -1,802.1 -10.0 374.00 204 174.8 -1,837.6
51 11 1 -1,837.6 210.4 203.8 -1,831.1 -10.5 374.00 204 174.8 -1,866.6
52 11 1 -1,866.6 210.4 203.8 -1,860.1 -11.0 374.00 204 174.8 -1,895.6
169.2
169.2
169.2
169.2
169.2
169.2
5th 169.2
169.2
169.2
169.2
169.2
169.2
169.2
Actual Costs

Regular Overtime Inventory Hiring and

Stockout Total For
Qtr Wk Production Production Carrying Training Layoff Cost Cumulative
Cost Week
Cost Cost Cost Cost
1 48,000 9,000 3,666 -457,569 0 0 -396,903 -396,903
2 48,000 9,000 3,487 -435,138 0 0 -374,652 -771,555
3 48,000 9,000 3,307 -412,708 0 0 -352,401 -1,123,955
4 48,000 9,000 3,127 -390,277 0 0 -330,150 -1,454,105
5 48,000 9,000 2,947 -367,846 0 0 -307,899 -1,762,004
6 48,000 9,000 2,768 -345,415 0 0 -285,648 -2,047,651
1st 7 48,000 9,000 2,588 -322,985 0 0 -263,397 -2,311,048
8 48,000 9,000 2,408 -300,554 0 0 -241,146 -2,552,193
9 48,000 9,000 2,229 -278,123 0 0 -218,895 -2,771,088
10 48,000 9,000 2,049 -255,692 0 0 -196,643 -2,967,732
11 48,000 9,000 1,869 -233,262 0 0 -174,392 -3,142,124
12 48,000 9,000 1,689 -210,831 0 0 -152,141 -3,294,265
13 48,000 9,000 1,510 -188,400 0 0 -129,890 -3,424,156
14 38,400 7,200 34 -4,198 0 36,000 77,435 -3,346,720
15 38,400 7,200 0 0 0 0 45,600 -3,301,120
16 38,400 7,200 0 0 0 0 45,600 -3,255,520
17 38,400 7,200 0 0 0 0 45,600 -3,209,920
18 38,400 7,200 0 0 0 0 45,600 -3,164,320
19 38,400 7,200 0 0 0 0 45,600 -3,118,720
2nd 20 38,400 7,200 0 0 0 0 45,600 -3,073,120
21 38,400 7,200 0 0 0 0 45,600 -3,027,520
22 38,400 7,200 0 0 0 0 45,600 -2,981,920
23 38,400 7,200 0 0 0 0 45,600 -2,936,320
24 38,400 7,200 0 0 0 0 45,600 -2,890,720
25 38,400 7,200 0 0 0 0 45,600 -2,845,120
26 38,400 7,200 0 0 0 0 45,600 -2,799,520
27 43,200 16,200 0 0 30,000 0 89,400 -2,710,120
28 43,200 16,200 0 0 0 0 59,400 -2,650,720
29 43,200 16,200 0 0 0 0 59,400 -2,591,320
30 43,200 16,200 0 0 0 0 59,400 -2,531,920
31 43,200 16,200 0 0 0 0 59,400 -2,472,520
32 43,200 16,200 0 0 0 0 59,400 -2,413,120
3rd 33 43,200 16,200 0 0 0 0 59,400 -2,353,720
34 43,200 16,200 0 0 0 0 59,400 -2,294,320
35 43,200 16,200 0 0 0 0 59,400 -2,234,920
36 43,200 16,200 0 0 0 0 59,400 -2,175,520
37 43,200 16,200 0 0 0 0 59,400 -2,116,120
38 43,200 16,200 0 0 0 0 59,400 -2,056,720
39 43,200 16,200 0 0 0 0 59,400 -1,997,320
40 52,800 9,900 0 0 60,000 0 122,700 -1,874,620
41 52,800 9,900 0 0 0 0 62,700 -1,811,920
42 52,800 9,900 0 0 0 0 62,700 -1,749,220
43 52,800 9,900 0 0 0 0 62,700 -1,686,520
44 52,800 9,900 0 0 0 0 62,700 -1,623,820
45 52,800 9,900 0 0 0 0 62,700 -1,561,120
4th 46 52,800 9,900 0 0 0 0 62,700 -1,498,420
47 52,800 9,900 0 0 0 0 62,700 -1,435,720
48 52,800 9,900 0 0 0 0 62,700 -1,373,020
49 52,800 9,900 0 0 0 0 62,700 -1,310,320
50 52,800 9,900 0 0 0 0 62,700 -1,247,620
51 52,800 9,900 0 0 0 0 62,700 -1,184,920
52 52,800 9,900 0 0 0 0 62,700 -1,122,220