Aggregate Planning

LAB: PROBLEM 3.13 COOKİE COMPANY

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Aggregate Planning
Case: BBOT UTE Cookie Company

BBOT UTE Cookie Company makes a variety of chocolate chip

cookies in Söğütözü, Ankara. Their cookie demand forcast is
given in Table 1. Their cost items are given in Table 2.
During a 46-day period when there were 120 workers, the
company produced 1.7 million cookies. Assume that the number
of workdays over the four months are respectively 26, 24, 20,
and 16. There are currently 100 workers employed, and there is
no starting inventory of cookies.
Aggregate Planning
Table 1. BBOT UTE Demand Forecast
Demand
Month Forecast Working Day
Jan 850000 26
Feb 1260000 24
Mar 510000 20
Apr 980000 16

Table 2. BBOT UTE Cost İtems

Cost İtem Cost ($)
cH (Cost of hiring one worker) ($) 100
cF (Cost of firing one worker) ($) 500
cI (Cost of holding one unit of inventory for one
month) ($) 0.1
Salary (monthly) 1500
Subcontract cost (per cookie) 0.5
Aggregate Planning
Questions:
Prepare the following aggregate plans for BBOT UTE Cookie Comp.
Compute the total costs. (NOTE- First SOLVE Plan1 & Plan4. Then Plan2&3.)
Plan1. Chase strategy – Zero İnventory (remember: Under the zero inventory plan the
workforce is changed each month in order to produce enough units to most closely match the
demand pattern.)

Plan2. Constant workforce– Change İnventory- No shortage (remember: capacity

is kept constant during the planning period (i.e., no workers are hired or fired) and instead
inventory is kept between periods; capacity is set to the minimum possible to ensure no
shortages in any period.)
Plan3. Constant workforce– Meet the minimum demand (capacity adjusted
to meet the minimum demand), satisfy the rest of the demand with
subcontracting.
Plan4. Optimal Plan – For the no shortages (and subcontracting)
allowed case