Assignment:
DAT, Inc., needs to develop an aggregate plan for its product line. Relevant data are :
Production time - 1 hour per unit
Beginning inventory - 500 units
Average labor cost - $10 per hour
Safety stock - one-half month
workweek - 5 days, 8 hours each day
shortage cost - $20 per unit per month
days per month - assume 20 workdays per month
carrying cost - $5 per unit per month
The forecast for next year is :
January - 2,500 ...
February - 3,000 ...
March - 4,000 ...
April - 3,500 ...
May - 3,500 ...
June - 3,000 ...
July - 3,000 ...
August - 4,000 ...
September - 4,000 ...
October - 4,000 ...
November - 3,000 ...
December - 3,000
- Management prefers to keep a constant workforce and production level, absorbing variations in demand through inventory excesses and shortages.
- Demand not met is carried over to the following month.
- Develop an aggregate plan that will meet the demand and other conditions of the problem.
- Do not try to find the optimum ; just find a good solution and state the procedure you might use to test for a better solution.
Make any necessary assumptions.