A manufacturer of industrial seafood processing equipment wants you to develop an aggregate plan for the four quarters of the upcoming year using the following data on demand and capacity
Quarter Units Regular Time Over-
time Sub-
contract Initial inventory Regular time cost 250 units $1.25/unit
1 200 400 80 100 Overtime cost $1.50/unit
2 750 400 80 100 Subcontracting cost 2.00/unit
3 1200 800 160 100 Carrying cost $0.50/unit/quarter
4 450 400 80 100 No back ordering is allowed
a. Find the optimal plan using the transportation method.
b. What is the cost of the plan?
c. Does any regular time capacity go unused? How much in what periods?
d. What capacity went unused in this solution? (List in detail.)
The optimal plan appears in the table below. A cost of 100 is assigned to "impossible" cells (no back orders are allowed.) Cost increases 0.50 for each period past the current period (carrying cost). The minimum cost solution is $3,360. Forty units of regular time capacity went unused in period 1. Other unused capacity includes OT-1, 80; Sub-1, 100; Sub-2, 100; and OT-4, 30; and Sub-4, 100.
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A firm uses the chase strategy of aggregate planning. It produced 1000 units in the last period. Demand in the next period is estimated at 800, and demand over the next six periods (its aggregate planning horizon) is estimated to average 900 units
Which of the following tactics would be most representative of following a chase strategy? A) add 100 units to inventory in the next period B) add 200 units to inventory in the next period C) hire workers to match the 100-unit difference D) lay off workers to match the 200-unit difference E) implement a lower price point to increase demand
The first step in the capital budgeting process is ________
A) review and analysis B) implementation C) decision making D) proposal generation