Aggregate Operation Plan Exercise
1. Plan production for next year from a product, if the forecasting of the product is known
in spring 20000 units, summer 10000 units, fall 15000 units, and winter 19000 units. At
the beginning of spring, the company had 65 employees and 500 units of inventory. The
government provides a policy that companies can fire workers only once a year, at the
beginning of the summer season. Companies can also hire new workers from late
summer to fall. The number of workers fired and the number hired is used for
production planning in the summer and fall seasons only. If demand exceeds supply, use
overtime only in the spring season, while backorder can be done in the winter season.
Given the following costs: hired cost, $100/worker, laid off $200/worker, holding 20 per
season-unit, straight time labor, $10 per hour; over time, $15 per hour, backorder cost,
$8/unit. Productivity 0.5 units/worker/hour, 8 hours per weekday, 50 days per season.
Calculate the total cost using aggregate planning!
2. Plan production planning for the period June-September. For June and July, the
company must produce exactly according to demand (exact demand). For August and
September, the company will use overtime and inventory with a stable workforce,
meaning that in August and September there will be no additional workforce. However,
government regulations only allow a maximum of 6000 hours of overtime per month for
August and September. If there is excess demand, it will be carried out in the following
month or backorder at the end of planning. On May 31, there were 100 workers, the
demand forecast is known, namely, Jun, 75000, July, 65000, August, 105000,
September, 45000. It is known that productivity is 4 units per person per hour, 8
hours/day, 20 days/month, with no inventory beginning. Costs: hiring, $50/person,
layoff, $70/person, holding, $10/unit/month, straight time labor, $10 per hour,
overtime,$15/hour, backorder or shortage, $20/unit. Determine the total cost of
production without materials!
