For this problem you must develop an aggregate plan based on the aggregate forecasted demand shown in the table below.
Month Forecasted demand
November 26
December 12
January 18
February 24
You will also need the following data:
Average number of units a worker can produce in one month 2
Initial inventory on hand 10
Initial number of workers 6
Desired inventory at the end of the planning period 12
Cost of hiring one worker $5
Cost of ?ring one worker $10
Cost of holding one unit of inventory for one month $1
(a) Recommend an aggregate plan (# hired and # ?red in each period) that results in zero inventory held in each period. Compute the following costs for this plan: hiring/?ring cost for each period, inventory cost for each period, total cost.
Recommend an aggregate plan (# hired and # ?red in each period) that has a constant workforce (level strategy; same number of workers in each period) and meets the total demand. Compute the following costs for this plan: hiring/?ring cost for each period, inventory cost for each period, total cost.
Recommend an aggregate plan (# hired and # ?red in each period) that has a lower total cost than your answers for part a and part b in the previous problem. Compute the following costs for this plan:
hiring/?ring cost for each period, inventory cost for each period, total cost.
Consider the numbers from the previous problem. Now subcontracting (outsourcing) is allowed in your aggregate plan. What would the cost of subcontracting have to be in order for you to recommend revising your aggregate plan in part (a) to include subcontracting? Give your revised aggregate plan (# hired/?red in each period and # subcontracted in each period) and compute the following costs for your revised plan: hiring/?ring cost for each period, inventory cost for each period, subcontract cost for each period, and total cost.