PART 1

In order to conduct aggregate planning for multiproduct, firstly we should calculate aggregate
unit. Because we want to plan the production for three different products, we should calculate
aggregate unit of products a worker can produce in a day. It is important to note that a
working day is assumed to be 8 hours=480 minutes and workers work with full efficiency
100% for calculations. Aggregate unit is calculated as below;

1. Calculate total demands for each product.

2. Divide demand of each product and find the percentages.
3. Calculate total processing time for each product (it is given in the case study file).
4. ∑(Percentage*processing time) gives us aggregate unit labor time.
5. Divide total available time in a day by aggregate unit labor time to find aggregate unit
of products a worker can produce in a day.
6. In order to find aggregate demand values of the weeks do the similar calculation in
step 4; ∑(Percentage*That weeks order quantity) gives us aggregate demands of
weeks.

Aggregate unit calculations

After calculating aggregate unit of demands and production capacity of a worker, we tried to plan the production with constant workforce and
zero inventory models which yielded a total cost of 2.003.676,81 dollars and 1.625.779,85 dollars respectively. It is important to note that a
weekday is assumed to be 8 hours=480 minutes and workers work with full efficiency 100% for calculations. A year is assumed to be exactly
52 weeks, thus, weekly inventory carriage rate is calculated by dividing annual carriage rate by 52. Calculations are given in the below tables
and the details and formulas are on the Excel file.

Constant workforce plan

Zero inventory plan

 Comparison of costs for these two models are given below. Finally, it is important to note
that zero inventory plan did not converge with actually zero inventory because while
calculating worker and product needs we rounded up the calculated number and while
calculating production output we rounded down the calculated value. Thus, small
decimals resulted in minimal stock levels but not zero. Similar situation is also observed
in constant workforce plan as a result of identical approach to rounding the numbers up or
down. The calculations tell us that zero inventory plan should be preferred due to less cost
incurring.

Costs Constant Workforce Zero Inventory

Cost of Hiring $0,00 $4.500,00
Cost of Firing $11.200,00 $19.600,00
Inventory Cost $1.546,81 $159,85
Labor Cost $136.800,00 $108.000,00
Manufacturing Cost $1.854.130,00 $1.493.520,00
Total Cost $2.003.676,81 $1.625.779,85

Cost comparison of two plans

PART 2

The results of master production scheduling and capacity planning is given below. According
to the calculations, red areas denote where requirements exceed capacity available. It can be
inferred from the figure that, Lathe and rip saw are perfectly sufficient for this demand levels
but rest of the departments are not especially tenon and finish. So capacity increase should be
considered in these departments.
Week 20 21 22 23 24 25 26 27 28 29 30 31 Initial Inventories
Stool 88 99 121 113 97 86 106 105 86 99 104 113 Stool 80 Department Stool Rocker Swing Available (Hours) Available (Minutes)
Forecast Demand Rocker 281 341 302 303 324 311 320 312 341 350 364 310 Rocker 300 Drill 7 10 11 70 4200
Swing 25 25 22 21 28 198 177 173 65 295 264 204 Swing 110 Lathe 15 0 0 35 2100
Crosscut
Stool 0 0 0 0 0 0 0 0 0 0 0 0 3 16 10 105 6300
saw
Inventory
Rocker 19 0 0 0 0 0 0 0 0 0 0 0 Rip Saw 1 3 4 40 2400
Swing 85 60 38 17 0 0 0 0 0 0 0 0 Mortise 0 10 8 70 4200
Stool 8 99 121 113 97 86 106 105 86 99 104 113 Tenon 3 22 11 105 6300
Router/Sha
MPS Rocker 0 322 302 303 324 311 320 312 341 350 364 310 0 5 3 35 2100
per
Swing 0 0 0 0 11 198 177 173 65 295 264 204 Plane 0 13 7 70 4200
Sand 5 25 35 145 8700
Week 20 21 22 23 24 25 26 27 28 29 30 31 Assemble 12 30 45 200 12000
Drill 56 3913 3867 3821 4040 5890 5889 5758 4727 7438 7272 6135 Finish 5 15 22 80 4800
Lathe 120 1485 1815 1695 1455 1290 1590 1575 1290 1485 1560 1695
Crosscut saw 24 5449 5195 5187 5585 7214 7208 7037 6364 8847 8776 7339
Rip Saw 8 1065 1027 1022 1113 1811 1774 1733 1369 2329 2252 1859
Mortise 0 3220 3020 3030 3328 4694 4616 4504 3930 5860 5752 4732
Tenon 24 7381 7007 7005 7540 9278 9305 9082 8475 11242 11224 9403
Router/Shaper 0 1610 1510 1515 1653 2149 2131 2079 1900 2635 2612 2162
Plane 0 4186 3926 3939 4289 5429 5399 5267 4888 6615 6580 5458
Sand 40 8545 8155 8140 8970 15135 14725 14380 11230 19570 18860 15455
Assemble 96 10848 10512 10446 11379 19272 18837 18405 14187 24963 24048 19836
Finish 40 5325 5135 5110 5587 9451 9224 9011 6975 12235 11788 9703

Master production scheduling and capacity planning

PART 3

MRP table is given below. For ease and accuracy requirements of these two items are shown
in the same table as F is common in both BOM trees. It is important to note that in order to
successfully execute the master production scheduling we should take our first action 8
weeks, 2 months before starting to production process and order 1450 units of Y.
Weeks
Part Level Lead On Hand Safety
Lot Size
Name Code Time Inventory Stock 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31

Required 125 250 122 110 250 110 150 164 256

Schedule Receipts

On hand Inventory 0
Stool 0 LFL 2 0 0
Net Requirements 125 0 250 122 110 0 250 0 110 150 164 256

Planned Orders 125 0 250 122 110 0 250 0 110 150 164 256

Given Orders 0 0 0 0 0 0 125 0 250 122 110 0 250 0 110 150 164 256 0 0

Required 200 20 50 25 112 251 125 26 15 18

Schedule Receipts

On hand Inventory 0
Swing 0 LFL 2 0 0
Net Requirements 200 20 50 25 112 0 0 251 125 26 15 18

Planned Orders 200 20 50 25 112 0 0 251 125 26 15 18

Given Orders 0 0 0 0 0 0 200 20 50 25 112 0 0 251 125 26 15 18 0 0

Required 0 0 0 0 0 0 650 40 600 294 444 0 500 502 470 352 358 548 0 0

Schedule Receipts

On hand Inventory 100 100 100 100 100 100 100 0 0 0 0 0 0 0 0 0 0 0 0 0 0

J 1 LFL 2 0 0
Net Requirements 0 0 0 0 0 0 550 40 600 294 444 0 500 502 470 352 358 548 0 0
Planned Orders 0 0 0 0 0 0 550 40 600 294 444 0 500 502 470 352 358 548 0 0

Given Orders 0 0 0 0 550 40 600 294 444 0 500 502 470 352 358 548 0 0 0 0

Required 0 0 0 0 0 0 375 0 750 366 330 0 750 0 330 450 492 768 0 0

Schedule Receipts 100

On hand Inventory 500 500 500 500 500 500 500 125 125 0 100
F 1 LFL 2 0 0
Net Requirements 0 0 0 0 0 0 0 0 625 266 330 0 750 0 330 450 492 768 0 0

Planned Orders 0 0 0 0 0 0 0 0 625 266 330 0 750 0 330 450 492 768 0 0

Given Orders 0 0 0 0 0 0 625 266 330 0 750 0 330 450 492 768 0 0 0 0

Required 0 0 0 0 0 0 1250 532 660 0 1500 0 660 900 984 1536 0 0 0 0

Schedule Receipts 250

On hand Inventory 250 250 250 250 250 250 250 0 0 0 0 0 0 0 250
R 2 LFL 2 0 0
Net Requirements 0 0 0 0 0 0 1000 532 660 0 1500 0 660 650 984 1536 0 0 0 0

Planned Orders 0 0 0 0 0 0 1000 532 660 0 1500 0 660 650 984 1536 0 0 0 0

Given Orders 0 0 0 0 1000 532 660 0 1500 0 660 650 984 1536 0 0 0 0 0 0

Required 0 0 0 0 0 0 6250 2660 3300 0 7500 0 3300 4500 4920 7680 0 0 0 0

Schedule Receipts

On hand Inventory 100 100 100 100 100 100 100 0

X 2 LFL 2 0 0
Net Requirements 0 0 0 0 0 0 6150 2660 3300 0 7500 0 3300 4500 4920 7680 0 0 0 0

Planned Orders 0 0 0 0 0 0 6150 2660 3300 0 7500 0 3300 4500 4920 7680 0 0 0 0

Given Orders 0 0 0 0 6150 2660 3300 0 7500 0 3300 4500 4920 7680 0 0 0 0 0 0

Required 0 0 0 0 0 0 800 80 200 100 448 0 0 1004 500 104 60 72 0 0

Schedule Receipts

On hand Inventory 50 50 50 50 50 50 50 0
Z 1 LFL 3 0 0
Net Requirements 0 0 0 0 0 0 750 80 200 100 448 0 0 1004 500 104 60 72 0 0

Planned Orders 0 0 0 0 0 0 750 80 200 100 448 0 0 1004 500 104 60 72 0 0

Given Orders 0 0 0 750 80 200 100 448 0 0 1004 500 104 60 72 0 0 0 0 0

Required 0 0 0 1500 160 400 200 896 0 0 2008 1000 208 120 144 0 0 0 0 0

Schedule Receipts 300

On hand Inventory 50 50 50 50 0 300 300

Y 2 LFL 3 0 0
Net Requirements 0 0 0 1450 160 400 200 896 0 0 2008 1000 208 120 144 0 0 0 0 0

Planned Orders 0 0 0 1450 160 400 200 896 0 0 2008 1000 208 120 144 0 0 0 0 0

Given Orders 1450 160 400 200 896 0 0 2008 1000 208 120 144 0 0 0 0 0 0 0 0

MRP table