ME3102D Management of Production Systems

Tutorial Worksheet 2 – Aggregate Planning

Monsoon 2022-23
Marks: 10
1. QuickPlus is a software developer that produces software products for three markets: [4]
business, home consumers, and educational institutions. The company has a customer
service operation that provides telephone support, and the number of customer service
calls for each of the three markets varies throughout the year. The average time spent
by a customer service representative on each call is 13 minutes. Each customer service
representative works on an average of 1,920 hours per year. The forecast for the number
of calls from each market group for each quarter next year is as follows:

Market Group Number of calls

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Business 1,50,000 1,68,000 1,18,000 1,21,000
Home 1,01,000 1,09,000 92,000 83,000
Education 68,000 81,000 1,75,000 1,01,000

Compute the number of customer service representatives needed for each market group
in each quarter, and compute the total number needed each quarter.

Suppose that after further investigation QuickPlus discovers that the time spent on
customer service calls varies by market group. The average time spent by a customer
service representative on each call is 7 minutes for business, 18 minutes for home
customers, and 14 minutes for education customers. Compute the number of customer
service representatives needed for each market group in each quarter, and compute the
total number needed in each quarter.

2. A company is planning the aggregate production capacity required to produce the sales [6]
forecast in this table:

Sales Forecast (thousands of tons)

Resin 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
A 9.0 10.0 12.0 14.0
B 7.0 8.0 5.0 10.0
C 6.0 3.0 4.0 7.0

Ample machine capacity exists to produce the forecast and each ton of resin requires
five labour hours.
(a) Compute the aggregate demand for resin in each quarter.
(b) Compute the aggregate number of labour hours in each quarter
(c) If each worker works 520 hours per quarter, how many workers will be required
in each quarter?

If it costs ₹2000 to hire a worker and ₹1000 to lay-off a worker, and inventory carrying
cost is ₹65 per ton of resin. The plant works the same number of days in each quarter,
13 five-day weeks. Evaluate two aggregate plans for the next year: (a) matching demand
and (b) level capacity with inventory. Which plan would you recommend? Justify your
recommendation. Assume that the pattern of quarterly demand repeats from year to year
and that beginning inventory is zero.

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