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Assignment 6
Assignment 6
\[ \text{Total Output Value} = (\text{Number of Undamaged Chairs} \times \text{Selling Price per
Undamaged Chair}) + (\text{Number of Damaged Chairs} \times \text{Selling Price per Damaged
Chair}) \]
Given:
Calculate:
Given:
Calculate:
\[ \text{Total Labor Input} = 200 \]
Given:
Compare the calculated labor productivity with the previous week's value and find the change.
This analysis will provide insights into how the productivity has changed from the previous week to the
current week.
To calculate the labor productivity ratio, we need to determine the total sales generated by the
production of chairs and divide it by the total number of labor hours worked.
Sales from undamaged chairs = Number of undamaged chairs * Price per undamaged chair
Sales from damaged chairs = Number of damaged chairs * Price per damaged chair
Total sales = Sales from undamaged chairs + Sales from damaged chairs
Labor productivity ratio = birr 7,280 / 200 hours = birr 36.4 per hour
To calculate the change in labor productivity, we need to compare the current labor productivity ratio to
the previous week's labor productivity.
Therefore, the change in labor productivity is a decrease of birr 13.6 per hour.
Let's start by solving part (a) and developing a hybrid aggregate plan using the initial workforce
supplemented by overtime. We will calculate the cost of this plan.
Given information:
\[
\begin{align*}
&\text{January: } 250, \text{ February: } 230, \text{ March: } 190, \text{ April: } 170, \\
&\text{May: } 200, \text{ June: } 220, \text{ July: } 220, \text{ August: } 220, \\
&\text{September: } 260, \text{ October: } 260, \text{ November: } 240, \text{ December: } 220
\end{align*}
\]
The total production in each month will be the sum of regular-time and overtime production:
\[ \text{Total Production} = RT + OT \]
If the ending inventory is negative, it means that back orders are needed:
2. Overtime labor cost: \( \$12 \times 1.5 \times OT \) (overtime rate is 1.5 times regular rate)
The total cost for each month is the sum of these components.
Now, let's calculate the cost for each month and the overall cost for the hybrid plan.
Certainly! Let's go step by step to calculate the cost for each month and the overall cost for the hybrid
plan.
1. **January:**
2. **February:**
3. **March:**
- Snow blowers produced (\(RT\)): Same as January and February (320 blowers)
We can continue this process for each month and then calculate the overall cost for the hybrid plan. Let
me know if you would like to proceed with the calculations for the remaining months and the summary.
Certainly! Let's continue with the calculations for the remaining months and then summarize the overall
cost for the hybrid plan.
4. **April:**
5. **May:**
We can repeat this process for the remaining months and then calculate the overall cost for the hybrid
plan by summing up the individual monthly costs. Let me know if you would like to proceed with the
calculations for the remaining months and the summary.
Certainly! Let's proceed with the calculations for the remaining months and then summarize the overall
cost for the hybrid plan.
6. **June:**
7. **July:**
8. **August:**
We can continue this process for the remaining months and then calculate the overall cost for the hybrid
plan by summing up the individual monthly costs. Let me know if you would like to proceed with the
calculations for the remaining months and the summary.
Certainly! Let's proceed with the calculations for the remaining months and then summarize the overall
cost for the hybrid plan.
9. **September:**
10. **October:**
11. **November:**
12. **December:**
Now, let's summarize the overall cost for the hybrid plan by adding up the individual monthly costs:
Feel free to let me know if you have any specific questions or if you would like further details!
(a) Hybrid Aggregate Plan with Overtime:
To develop a hybrid aggregate plan using the initial workforce supplemented by overtime, we need to
calculate the production and costs for each month based on the given demand projections.
- With 20 workers, the regular-time production capacity is 20 workers * 10 units/worker = 200 units
per month.
- Each worker works 160 regular-time hours, so they have 40 overtime hours available.
- Each worker can produce an additional 4 units during overtime (40 overtime hours / 10 units per
hour = 4 units).
- With 20 workers, the total overtime production capacity is 20 workers * 4 units/worker = 80 units per
month.
- The total production capacity is the sum of regular-time and overtime production.
- Total production capacity = Regular-time production + Overtime production = 200 units + 80 units =
280 units per month.
4. Calculate Ending Inventory and Back Orders:
- For each month, compare the demand with the total production capacity and starting inventory:
- If demand is less than or equal to the total production capacity + starting inventory, no back orders
are needed. The ending inventory is the total production capacity + starting inventory - demand.
- If demand is greater than the total production capacity + starting inventory, back orders are needed.
The ending inventory is 0, and the back orders are the demand - total production capacity - starting
inventory.
5. Calculate Costs:
- Calculate the holding costs and back-order costs for each month based on the ending inventory and
back orders.
To calculate the cost of a level plan that uses inventory and back orders to absorb fluctuations, we need
to determine the average inventory level and the back-order costs.
- For each month, if demand exceeds the total production capacity + starting inventory, back orders
are needed. The back-order costs are the back orders * $10 per unit per period.
(c) Hybrid Plan with Facility Closure in July:
To calculate the cost of a hybrid plan with facility closure in July, we need to consider the regular-time
production, overtime production, inventory, and back orders for the remaining months.
- For each month except July, follow the same steps as in the hybrid plan with overtime.
- For July, the facility is closed, so there is no production. The ending inventory is the starting
inventory, and there are no back orders.
3. Calculate Costs:
- Calculate the holding costs and back-order costs for each month based on the ending inventory and
back orders.
To compare the three plans in terms of cost, customer service, operations, and human resources, we
need to analyze the results of each plan.
1. Cost:
- Compare the total costs of each plan calculated in parts (a), (b), and (c).
- Consider the costs of regular-time production, overtime production, inventory holding, and back
orders.
2. Customer Service:
- Evaluate the customer service level for each plan based on the presence of back orders and the
ability to meet demand.
- Compare the number of back orders and the percentage of demand met for each plan.
3. Operations:
- Compare the production capacity utilization, overtime usage, and inventory levels for each plan.
4. Human Resources:
- Consider the impact on the workforce in terms of overtime hours, hiring or laying off workers, and
the facility closure in July.
- Compare the workforce management strategies and their implications for employee satisfaction and
productivity.
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