Answer Happy

QUESTION ONE As planners for a company that makes several models of standalone fans are about to prepare the aggregate plan that will cover six periods. They have assembled the following information. Period Total 1 2 3 4 5 6 Forecast costs 200 200 300 400 500 200 1800 Output Regular time Overtime = K2 per skateboard = K3 per skateboard Subcontract = K6 per skateboard Inventory = K1 per skateboard per period on average inventory Back orders = K5 per skateboard per period They now want to evaluate a plan that calls for a steady rate of regular-time output, mainly using inventory to absorb the uneven demand but allowing some backlog. Overtime and subcontracting are not used because they want steady output. They intend to start with zero inventory on hand in the first period. Prepare an aggregate plan and determine its cost using the preceding information. Assume a level output rate of 300 units (skateboards) per period with regular time (i.e., 1,800/6 = 300). Note that the planned ending inventory is zero. There are 15 workers, and each can produce 20 skateboards per period.