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Aggregate Planning: Example: (Adapted From Chase and Aquilano, "Fundamentals of Operations Management", Irwin Pub., 1991)
Aggregate Planning: Example: (Adapted From Chase and Aquilano, "Fundamentals of Operations Management", Irwin Pub., 1991)
Aggregate Planning: Example: (Adapted From Chase and Aquilano, "Fundamentals of Operations Management", Irwin Pub., 1991)
Example
(Adapted from Chase and Aquilano,
Fundamentals of Operations Management,
Irwin Pub., 1991)
Example: Introduction
A vacuum cleaner manufacturer tries to plan ahead in order to
effectively address the seasonal variation appearing in the annual
demand of its products. A planning horizon of 6 months is used.
The (aggregate) demand forecast for the next six months along
the number of working days are as follows:
Month
Jan.
Febr.
March
April
May
June
Cost($)
$100 per unit
$5 per unit per month
$10 per unit per month
$20 per unit
$1000 per worker
$1500 per worker
$15 per employee per hour
$20 per employee per hour
Current Inventory
400 units
Current Workforce
38 workers
Labor hours per unit
5 employee-hours/unit
Regular labor time per employee per day
8 hours
Inventory at the end of each month
25% of coresp. demand
PC
185000
142500
100000
85000
115000
172500
800000
WC
139920
107160
75600
63000
87120
129600
602400
HC
15000
0
0
0
8000
21000
44000
TC=
FC
0
9000
25500
7500
0
0
42000
1488400
2,000
1,800
1,600
1,400
1,200
Series2
1,000
800
Series1
600
400
200
0
1
SC
FC
112200 18000
76200
0
15120
0
0
0
28200
0
107160
0
338880 18000
TC= 1264480
Series1
1,000
800
Series2
Series3
600
400
200
0
1
PC
133800
115500
127700
127700
133800
121500
760000
WC
100320
86640
95760
95760
100320
91200
570000
IC
0
0
0
735
1925
0
2660
TC=
BC
620
4070
2300
0
0
0
6990
1339650
Series2
Series3
0
1
-500
-1,000
Analytical Approach:
A Linear Programming Formulation
min TC = St ( PCt*Pt+WCt*Wt+OCt*Ot+HCt*Ht+FCt*Ft+
SCt*St+ICt*It+BCt*Bt )
s.t.
t, Pt+It-1+St = (Dt-Bt)+Bt-1+It
t, Wt = Wt-1+Ht-Ft
t, 5*Pt 8*WDt*Wt+Ot
( t, It 0.25*Dt )
B6= 0
t, Pt, Wt, Ot, Ht, Ft, St, It, Bt 0