Question

I. Describe the differences between level, chase, and mixed production plans. Use the forecast in the table to show the differences by creating a plan of each type. There is no beginning inventory and regular production capacity is 350 units. Overtime costs $10 extra and is limited to 50 units per month. Subcontracting is limited to 100 units per month and costs $15 per unit. Back orders cost $40 per unit and there is a cost of $5 per month to hold a unit in inventory. There is room for only 100 units in inventory. Month January February March April Forecast 250 300 500 350

Answer 1

used to absoob the es as well = 1400 it 4 comes up to 350 Ulnits Boduction is constant in the production plan with a fact that the inventory being differences which which are between sáles forecast neith the production : In the production plan i production being changed every time for meeting the sales forecast. Mixed production plan beling varied upon the production as with Enventory for developing the most Cost effective plan. Total fooceast demand 250+ 300+ 500+ 350, If druiding 1400 By pen month, Which of exactly equal to the capacity Month Forecast Regular Level Plan Sub Ending Overtime contracting Inventory January 250 February Mauch April regular Capacity oppootunity for March, Oveetime ķ Subcontracting nie'cl be which are at the ermit. Chase Plan Month Forecast Regular Oveertime ending Contracting Inventory 250 January 300 Mauch -_ April 325 325 325 75 loo 300 -75 350 325 - 100 has Chase but plan covered Sub- February 250 300 350 350 500 Jo 100 o 350

Mixed Plam be going to have infinite possibilities & - Month Forecast Regular Overtime Sub contracting Ending Inventory January 250 Febgurary 300 March 500 Apoile 300 50 300 50 350 50 50 350 350