Question

A Juarez, Mexico, manufacturer of roofing supplies has developed monthly forecasts for a family of products. Data for the 6-month period January to June are presented in the table below. There are 8 hours of production per day. a) The firm would like to begin development of an aggregate plan. For this plan, plan 5, the firm wishes to maintain a constant workforce of 6, using subcontracting to meet remaining demand. Evaluate this plan. To determine whether this plan is desirable, first calculate demand per day for each month (enter your responses rounded to the nearest whole number). Table 1 Month Production Days Demand Forecast 950 1 January 18 750 42 750 2 February 3 March 4 April 5 May 6 June Avg Dem Per Other data Prod. Day Inventory carrying cost $5 per unit per month Subcontracting cost per unit $10 per unit 43 Average pay rate $5 per hour ($40 per day) Overtime pay Rate $7 per hour (above 8 hrs per day) 36 Labor-hours per unit 1.6 hrs per unit Cost of increasing daily $300 per unit production rate (hiring & 59 training) Cost of decreasing daily $600 per unit production rate (layoffs) 1,000 48 1.300 1,050 The production rate per day = 30 units. (Enter your response as a whole number.) Fill in the table below. (Enter your responses as whole numbers.) Regular Subcontract

The total subcontracting

costequals=​$ ????

​(Enter your response as a whole​ number.)

Total cost with plan 5​ = ????

Juarez has yet a sixth plan. A constant workforce of 7 is​ selected, with the remainder of demand filled by subcontracting. Evaluate this plan.The production rate per day equals= ????

Answer 1

Plan 5:

No. of constant workers to be maintained = 6 workers

Hours available per day per worker = 8 hours per day

Daily hours available per worker per day = 6*8 =48 hours

Labor hours per unit = 1.6 hours per unit = 1.6 hours per unit

Production rate per day = 56/1.6 = 30 units per day

Subcontract cost per unit = $ 10 per unit

Month	Production days	Demand Forecast	Regular Production	Subcontract (units)	Production cost	Subcontracting cost	Total cost
			=30*Production days	=Demand Forecast - Regular Production	=Production days*$40*6 workers	=Subcontract units * Subcontract cost per unit	=Production cost + Subcontracting cost
January	22	950	660	290	5280	2900	8180
February	18	750	540	210	4320	2100	6420
March	21	750	630	120	5040	1200	6240
April	21	1000	630	370	5040	3700	8740
May	22	1300	660	640	5280	6400	11680
June	20	1050	600	450	4800	4500	9300
				Total	29800	20800	50600

As per the above calculations:

Total Production cost = $ 29800

Total Subcontract cost = $ 20800

Total cost for plan 5= Total Production cost + Total Subcontracting cost = 29800+20800 = $50600

Plan 6:

No. of constant workers to be maintained = 7 workers

Hours available per day per worker = 8 hours per day

Daily hours available per worker per day = 7*8 = 56 hours

Labor hours per unit = 1.6 hours per unit = 1.6 hours per unit

Production rate per day = 56/1.6 = 35 units per day