Find the minimum constant workforce:
ABC Company, a manufacturer of roofing supplies, has developed monthly forecasts for roofing tiles. The forecasted demand and the expected production days for months January to June in 2013 are given below:
|
Month
|
Forecasted demand (units)
|
Production days
|
|
January
|
1200
|
22
|
|
February
|
2500
|
19
|
|
March
|
1300
|
21
|
|
April
|
3500
|
20
|
|
May
|
1200
|
22
|
|
June
|
1700
|
20
|
ABC works 8 regular hours in each working day and past experience shows that one worker takes 2 hours to produce one tile. The company has estimated that there would be 6 production workers working in December 2012 and 550 tiles in inventory at the end of December 2012. Labor Union restricts ABC that overtime hours cannot exceed 20% of straight time (regular) hours in each month. ABC wants to keep at least 200 tiles in inventory at the end of June 2013. ABC has the following cost information:
|
Inventory holding cost
|
$5/unit/month
|
|
Backorder cost
|
$12/unit
|
|
Subcontracting cost
|
$28/unit
|
|
Straight time labor cost
|
$10/hour
|
|
Overtime cost
|
$20/hour
|
|
Hiring cost
|
$1000
|
|
Firing cost
|
$2000
|
If ABC allows backorders but does not want to use subcontracting or overtime,
a. Find the minimum constant workforce required to meet the above requirement (level production strategy).
b. Develop an aggregate production plan with the minimum constant workforce obtained in part (a) (level production strategy).
c. Estimate the total cost of the plan in (b).
If ABC wants to maintain zero inventory at the end of each month in 2013 except June, and does not want to use subcontracting or overtime,
d. Develop an aggregate production plan with zero inventory policy (chase strategy with flexible working hours).
e. Estimate the total cost of the plan in (d)