Operations Management Assignment 2

ASSIGNMENT TO BE SUBMITTED

1. Distinguish between Aggregate Production Planning and Material

Requirement Panning
2. Compare and Contrast Lean Production System and Traditional
Production System.
3. Discuss the theory of constraints with an appropriate example.
4. Assuming that there is no beginning inventory and level of output rate
at regular time with 15 employees is 100,000 units.
Regular cost of production is birr 2 per unit; overtime cost is birr 5 per
unit; subcontracting cost is birr 8 per unit; inventory cost on ending
inventory is birr 0.5; backorder cost is birr 4 per unit and hiring cost
per employee is 250 birr. Prepare the APP

5. The same information withquestion 4: Assuming that one person is

about to retire from the company and rather than replacing the person,
they would like to continue producing with smaller workers and use
over time to make up the lost output. The reduced regular output is
20,000 units per period. The maximum amount of OT per period is
40,000.Required: Prepare the APP
6. Assuming the same information with question 4: but instead of using
OT, the Company wants to subcontract with the maximum amount of
80,000 units. Prepare the APP and calculate the total cost of the plan
NB. Sub- contract can be used in a period where output can’t cover
forecasted dd.
7. Assuming the same information with question 4:But, instead of using
over time, the company use temporary workers to fill in during the

Compiled by Asmamaw T. (PhD) Page 1

 Operations Management Assignment 2

month of high demand. Suppose that a temporary worker can produce

at a rate of 15,000 units per period.
Required:
A. How many temporary employees are required
B. Prepare the APP
C. Calculate the total cost of the plan

Compiled by Asmamaw T. (PhD) Page 2