Tables 8-2, 8-3

Aggregate Planning (Chapter 8−9)

Demand Forecast

Month Demand Forecast

January 1,600
February 3,000
March 3,200
April 3,800
May 2,200
June 2,200

Costs

Item Cost
Materials cost/unit $ 10
Inventory holding cost/unit/month $ 2
Marginal cost of stockout/unit/month $ 5
Hiring and training cost/worker $ 300
Layoff cost/worker $ 500
Labor hours required/unit 4
Regular time cost/hour $ 4
Over time cost/hour $ 6
Marginal subcontracting cost/unit $ 30

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 Planning

Aggregate Plan Decision Variables

Ht Lt Wt Ot It St Ct Pt
Period # Hired # Laid off # Workforce Overtime Inventory Stockout Subcontract Production Demand Price
0 0 0 80 0 1,000 0 0
1 0 16 64 0 1,960 0 0 2,560 1,600 40
2 0 0 64 0 1,520 0 0 2,560 3,000 40
3 0 0 64 0 880 0 0 2,560 3,200 40
4 0 0 64 0 0 220 140 2,560 3,800 40
5 0 0 64 0 140 0 0 2,560 2,200 40
6 0 0 64 0 500 0 0 2,560 2,200 40
Total Cost = $ 422,660
Base Price $ 40
Total Revenue = $ 640,000 Promote? (0/1) 0 Consumption 0.10
Profit = $ 217,340 Month (1/4) 4 Forward Buy 0.20

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 Aggregate Plan

4,000

3,500

3,000

2,500
Inventory
Production
2,000 Demand
Stockout
Subcontracting
1,500

1,000

500

0
1 2 3 4 5 6

Period
 Sheet2

Aggregate Plan

Period # Hired # Laid off # Workforce Overtime Inventory Stockout Subcontract

0 0 0 80 1000 0 0
1 0 18 62 0 1880 0 0
2 0 0 62 0 1360 0 0
3 0 0 62 620 795 0 0
4 0 0 62 620 0 370 0
5 0 0 62 620 65 0 0
6 0 0 62 620 500 0 0

Aggregate Plan Costs

Period Hiring Lay off Regular Time Overtime Inventory Stockout Subcontract
1 0 9000 39680 0 3760 0 0
2 0 0 39680 0 2720 0 0
3 0 0 39680 0 1590 0 0
4 0 0 39680 0 0 1850 0
5 0 0 39680 0 130 0 0
6 0 0 39680 0 1000 0 0

Total Cost = 258130

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 Sheet2

Production Demand

2480 1,600
2480 3,000
2635 3,200
2635 3,800
2635 2,200
2635 2,200

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 Sheet3

Aggregate Plan Decision Variables

Period # Hired # Laid off # Workforce Overtime Inventory Stockout Subcontract

0 0
1 0
2 0
3 16
4 0
5 0
6 0
0 80 0 1,000 0 0
29 51 0 1,450 0 0
0 51 0 500 0 0
0 68 0 0 0 0
0 68 0 0 500 600
0 68 0 0 0 0
0 68 0 500 0 0

Aggregate Plan Costs

Period Hiring Lay off Regular Time Overtime Inventory Stockout Subcontract
1 0 14,375 32,800 0 2,900 0 0
2 0 0 32,800 0 1,000 0 0
3 0 0 43,200 0 0 0 0
4 0 0 43,200 0 0 2,500 18,000
5 0 0 43,200 0 0 0 0
6 0 0 43,200 0 1,000 0 0

Total Cost = $ 427,175

Total Revenue = $ 496,000

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 Sheet3

Constraints

Production Demand Workforce Production Inventory Overtime

2,050 1,600 0 0 0 513

2,050 3,000 0 0 0 513
2,700 3,200 0 0 0 675
2,700 3,800 0 0 0 675
2,700 2,200 0 0 0 675
2,700 2,200 0 0 0 675

Material
20,500
20,500
27,000
27,000
27,000
27,000

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