Inventory and subcontracting to absorb the fluctuations

Assignment Help Operation Management

Reference no: EM13970684

ABC Company uses overtime, inventory and subcontracting to absorb the fluctuations in demand for its playgrounds for children. An aggregate production plan is devised annually and updated quarterly. Cost data, expected demand, and available capacities in units for the next four quarters are given here. Demand must be satisfied in the periods it occurs; that is, no backordering is allowed. Design a production plan that will satisfy demand at minimum cost.

Expected Regular Overtime Subcontract

Quarter Demand Capacity Capacity Capacity

1 650 750 100 500

2 1250 950 150 500

3 1350 1050 200 500

4 2750 1050 200 500

Regular production cost per unit $200

Overtime production cost per unit $250

Subcontracting production cost per unit $300

Inventory holding cost per unit per period $30

Beginning Inventory 300 units

Reference no: EM13970684

Questions Cloud

Visualize yourself as an executive at target : Visualize yourself as an executive at Target. Develop a policy to empower customer service desk associates to resolve customer problems, including the limits to their empowerment.

Contrast global workers-expatriates and local nationals : Compare and contrast global workers, expatriates, local nationals, and third-country nationals. What impact, if any, do they have on international pay systems?

Knowledge management tools does this organization utilize : Provide a description of an organization you are familiar with (possibly a company you have worked for in the past or are currently working for) and describe briefly what services they contribute. What personal knowledge management tools does this or..

What are the three phases of architectural design : Discuss the history of jails in America. What are the three phases of architectural design? Why is the increased incarceration rate of women such an issue in jails across America?

Inventory and subcontracting to absorb the fluctuations : ABC Company uses overtime, inventory and subcontracting to absorb the fluctuations in demand for its playgrounds for children. An aggregate production plan is devised annually and updated quarterly. Demand must be satisfied in the periods it occurs; ..

Two major corporations in different industries : Research the Websites of two major corporations in different industries (examples: manufacturing, retail, transportation, utilities, healthcare, communication). What conclusion do you reach about whether an environmentally conscious (or green) person..

Respective cash flows and probabilities of occurrence : A decision maker must decide whether or not automate a given process. Depending on the technological success of the automation project, the result will turn out to be either poor, fair, or excellent. Show the expected future events (outcomes), along ..

What is the optimal order size and annual cost per product : SuperPart, an auto part distributor, has a large warehouse in Istanbul region and is deciding on a policy for the use of TL or TLT transportation for inbound shipping. TLT shipping costs $1 per unit. TL shipping costs $800 per truck plus $100 per pic..

User Account

All Pages