Production Management

Homework/Assignment 3
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Contents of questions
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Question 1: 14.3 (14.5 in 6th edition)

Question 2: A manager is apptempting to put together an aggregate plan for the

cmoing year. She has obtained a forecast pf expected demand for the planning horizon.
The plan must deal with highly seasonal demand as can be seen from the following
forecasts:

Period 1 2 3 4 5 6 7 8 9
Forecastes
demand 190 230 260 280 210 170 160 260 180
(units)

The department has 20 full-time operators, each of whom can produce 10 units of
output per period. Starting inventory is 40 units and 20% is safety stock.

Cost    
Inventory holding cost $5 per unit
Hiring and tranning
cost $300 per worker
Layoff cost $500 per worker
Cost of subcontracting $30 per unit
Regular-time cost $4 per hour
Overtime cost $6 per hour
Blacklog cost $10 per unit
A. Determine the total cost of the plan for strategies as belows:
a. Hiring and firing, no overtime
b. Constant workforce
c. Subcontracting
B. Which startegy provided the lowest cost?

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Answers/Works

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