Assignment: Production Planning

production, planning, production planning
§ Production Planning §

Assignments

Send to your instructor a single Excel file (including written answers) as e-mail an attachment through WebMail. addressed to BA501@mail.cba.nau.edu and put BA501 (last name) Assignment name and number somewhere in the e-mail "subject." If you have any questions on this home work, please e-mail me with questions. Here is the Excel file for this assignment. Use "save as" to save it to your computer or to a floppy.

Assignment – Production Planning

1. Sue Badger, operations manager at Kimball Furniture, has received the following estimates of demand requirements:

April	May	June	July	August	September
1000	1200	1400	1800	1800	1600

Assuming stock out costs for lost sales of $100 and inventory carrying costs of $25 per unit per month, evaluate these two plans:

Plan A - Produce at a steady rate (equal to minimum requirements) of 1000 units per month and subcontract additional units at a $60 per unit premium cost.

Plan B – Vary the workforce, which performs at a current production level of 1300 units per month. The cost of hiring additional workers is $3000 per 100 units produced. The cost of layoffs is $6000 per 100 units cut back.

2. Sue Badger, is considering two more mixed strategies. Using the data from problem 1, compare plans C and D with plans A and B and make a recommendation:

Plan C – Keep the current workforce steady at a level producing 1300 units per month. Subcontract the remainder to meet demand. Assume that 300 units remaining from March are available in April.

Plan D – Keep the current workforce at a level capable of producing 1300 units per month. Permit a maximum of 20% overtime at a premium of $40 per unit. Assume that warehouse limitations permit no more than a 180-unit carryover from month to month. This plan means that any time inventories reach 180, the plant is kept idle. Idle time per unit is $60. Any additional needs are subcontracted at a cost of $60 per unit.

3. Continuing with the example presented in this Lesson, Daves operation’s manager is also considering one more mixed strategy. Keep the current workforce, which is producing 1600 units per month, and subcontract to meet the rest of the demand.