Need help with your Discussion

Get a timely done, PLAGIARISM-FREE paper
from our highly-qualified writers!

glass
pen
clip
papers
heaphones

Aggregate Planning

Aggregate Planning

Sample Answer 

Aggregate Planning

Problem 2

Listing out the known data:

Cost data  
Regular-time labor cost per hour  $   10.00
Overtime labor cost per hour  $   15.00
Subcontracting cost per unit (labor only)  $   84.00
Holding cost per unit per period  $   20.00
Back-order cost per unit per period  $   10.00
Hiring cost per employee  $ 600.00
Firing cost per employee  $ 450.00
Capacity data
Beginning workforce 210
Beginning Inventory 400
Labor standard per unit 6
Regular time available per period 160
Overtime available per period 32
Subcontracting maximum per period 1000
Subcontracting minimum per period 500
Demand data
Period 1 6000
Period 2 4800
Period 3 7840
Period 4 5200
Period 5 6560
Period 6 3600
Total Number of periods 6

To develop the aggregate plan:

Choose the kind of aggregate plan. We will use a level plan.

Calculate the aggregate production rate. Since back-orders are not allowed, the period with the highest production rate will determine the aggregate production rate to be used in this plan.

Calculate the workforce size given the aggregate production rate.

The plan is shown below.

Level Aggregate Plan, using inventories but no back orders
Detailed plan computations Period
  1 2 3 4 5 6 Total
Demand (units) 5600 4800 7840 5200 6560 3600
Cumulative demand (units) 5600 10400 18240 23440 30000 33600
Cumulative demand/periods 5600 5200 6080 5860 6000 5600
Period production (units) 6080 6080 6080 6080 6080 6080 36480
Cumulative production (units) 6080 12160 18240 24320 30400 36480
Cum.Dem. Minus Cum.Prod. -480 -1760 0 -880 -400 -2880
Ending Inventory (units) 480 1760 0 880 400 2880 6400
Back-orders (units) 0 0 0 0 0 0 0
Compute Level Production Rate and Workforce Needed
Production Rate (units) 6080
Units per Employee per Period 26.67
Employees Needed 228
Number to Hire 18
Number to Fire 0
Cost Calculations for Plan B
Regular-time labor cost $   2,188,800
Overtime labor cost $                  –
Inventory holding cost $         64,000
Back-order cost $                  –
Hiring cost $         10,800
Firing cost $                  –
Total Cost $   2,263,600

Table 2: Plan 1 – Level Aggregate Plan

  • From the above table, Aggregate Production Rate is 6,080
  • The workforce required to produce the aggregate production rate (6,080)

Since the production rate per employee during regular time is 20.666 units per period, the requirement for this plan is 228 employees. Therefore, an additional 18 employees are needed.

  • If this plan was implemented, there would be an increase in holding costs in the future as the plan creates a high inventory level after the first three periods.

From Table 2, the various costs are:

Regular-time labor cost = $2,188,800

Inventory holding cost = $64,000

Hiring cost = $10,800

Total Cost = $2,263,600

To Evaluate the plan in terms of cost, customer service, operations, and human resources. Develop a second table for comparison.

Level Aggregate Plan, using inventories and back orders
Detailed plan computations Period
  1 2 3 4 5 6 Total
Demand (units) 5600 4800 7840 5200 6560 3600
Cumulative demand (units) 5600 10400 18240 23440 30000 33600
Cumulative demand/periods 5600 5200 6080 5860 6000 5600
Period production (units) 5600 5600 5600 5600 5600 5600 33600
Cumulative production (units) 5600 11200 16800 22400 28000 33600
Cum.Dem. Minus Cum.Prod. 0 -800 1440 1040 2000 0
Ending Inventory (units) 0 800 0 0 0 0 800
Back-orders (units) 0 0 1440 1040 2000 0 4480
Compute Level Production Rate and Workforce Needed
Production Rate (units) 5600
Units per Employee per Period 26.67
Employees Needed 210
Number to Hire 0
Number to Fire 0
Cost Calculations for Plan B
Regular-time labor cost $   2,016,000
Overtime labor cost $                  –
Inventory holding cost $         8,000
Back-order cost  $         89,600
Hiring cost $                 –
Firing cost $                  –
Total Cost $   2,113,600

Table 3. Plan 2 – Aggregate Level Plan

Comparing the two plans:

  1. There is a decrease in total cost for the second plan compared to the first plan, $2,113,600 compared to $2,263,600.
  2. The amount of production plan units for the second plan has also reduced from 36,480 units to 33,600 units. This would signify an increased
  3. The unit cost for the two plans compare as follows:

Unit cost for plan 1=2,263,600/36,480=62.05
Unit cost for plan 2=2,113,600/33,600=62.90

The unit cost for plan 1 is lower, with a better customer service score as there are no back orders.

Aggregate Planning Worksheet For Attached Tables

References

Reid, R. D., & Sanders, N. R. (2016). Operations Management, Binder Ready Version: An Integrated Approach. John Wiley & Sons.

ORDER A PLAGIARISM-FREE PAPER HERE

We’ll write everything from scratch

Question 


[u08a2] Unit 8 Assignment 2 Aggregate Planning

Complete problem 2 on page 511 of your textbook. For help on how to complete this problem, see the Solved Problems on pages 504–510.

Aggregate Planning

Aggregate Planning

When completed, submit your answers as an attachment in the assignment area. Be sure to include your work with the answer.

Resources

Aggregate Planning Scoring Guide

  • Due Date:Unit 8
    Percentage of Course Grade: 2%.
CRITERIA DISTINGUISHED
Accurately solves all computation aspects of the aggregate planning problem.
50%
Accurately solves all computation aspects of the problem and shows work.
Provides summary, and/or rationale useful in interpreting the aggregate planning results.
50%
Accurately summarizes salient points with supporting rationale for interpreting results.

Have a similar assignment? "Place an order for your assignment and have exceptional work written by our team of experts, guaranteeing you A results."

Order Solution Now

Our Service Charter


1. Professional & Expert Writers: Eminence Papers only hires the best. Our writers are specially selected and recruited, after which they undergo further training to perfect their skills for specialization purposes. Moreover, our writers are holders of masters and Ph.D. degrees. They have impressive academic records, besides being native English speakers.

2. Top Quality Papers: Our customers are always guaranteed of papers that exceed their expectations. All our writers have +5 years of experience. This implies that all papers are written by individuals who are experts in their fields. In addition, the quality team reviews all the papers before sending them to the customers.

3. Plagiarism-Free Papers: All papers provided by Eminence Papers are written from scratch. Appropriate referencing and citation of key information are followed. Plagiarism checkers are used by the Quality assurance team and our editors just to double-check that there are no instances of plagiarism.

4. Timely Delivery: Time wasted is equivalent to a failed dedication and commitment. Eminence Papers are known for the timely delivery of any pending customer orders. Customers are well informed of the progress of their papers to ensure they keep track of what the writer is providing before the final draft is sent for grading.

5. Affordable Prices: Our prices are fairly structured to fit in all groups. Any customer willing to place their assignments with us can do so at very affordable prices. In addition, our customers enjoy regular discounts and bonuses.

6. 24/7 Customer Support: At Eminence Papers, we have put in place a team of experts who answer all customer inquiries promptly. The best part is the ever-availability of the team. Customers can make inquiries anytime.

We Can Write It for You! Enjoy 20% OFF on This Order. Use Code SAVE20

Stuck with your Assignment?

Enjoy 20% OFF Today
Use code SAVE20