Tables 9-4

Aggregate Planning (Chapter 8-9)

Demand Forecast

Month Demand Forecast

January 10000
February 11000
March 15000
April 18000
May 25000
June 26000
July 30000
August 29000
September 21000
October 18000
November 14000
December 11000

Costs

Item Cost
Materials cost/unit $ 40
Inventory holding cost/unit/month $ 5
Marginal cost of stockout/unit/month
Hiring and training cost/worker $ 1,000
Layoff cost/worker $ 2,000
Labor hours required/unit 2
Regular time cost/hour $ 15
Over time cost/hour $ 22
Marginal subcontracting cost/unit $ 75
Price ($/unit) $ 125

Inventory 5000
Workload 250

Page 1
Aggregate Plan Decision Variables
Ht Lt Wt Ot It St Ct Pt
Period # Hired # Laid off # Workfor Overtime Inventory Stockout SubcontraProductio Demand
0 0 0 250 0 5,000 0 0
1 10,000
2 11,000
3 15,000
4 18000
5 25000
6 26000
7 41000
8 26100
9 18900
10 18,000
11 14,000
12 11,000

COST
Ht Lt Wt Ot It St Ct Pt
Period # Hired # Laid off # Workfor Overtime Inventory Stockout SubcontraProduction
1 0 0 0 0 0 0 0 0
2 0 0 0 0 0 0 0 0
3 0 0 0 0 0 0 0 0
4 0 0 0 0 0 0 0 0
5 0 0 0 0 0 0 0 0
6 0 0 0 0 0 0 0 0
7 0 0 0 0 0 0 0 0
8 0 0 0 0 0 0 0 0
9 0 0 0 0 0 0 0 0
10 0 0 0 0 0 0 0 0
11 0 0 0 0 0 0 0 0
12 0 0 0 0 0 0 0 0

Total Cost = $ -

Total Revenue = $ 58,397,500

Profit = $ 58,397,500
Price WorkforceCapacity Inventory Over time

250 -250 0 -5000 0

250 0 0 -11000 0
250 0 0 -15000 0
250 0 0 -18000 0
250 0 0 -25000 0
250 0 0 -26000 0
247.50 0 0 -41000 0
250 0 0 -26100 0
250 0 0 -18900 0
250 0 0 -18000 0
250 0 0 -14000 0
250 0 0 -11000 0
Aggregate Plan Decision Variables
Ht Lt Wt Ot It St Ct Pt
Period # Hired # Laid off # Workfor Overtime Inventory Stockout SubcontraProductio Demand
0 0 0 250 0 5,000 0 0
1 10,000
2 11,000
3 15,000
4 26700
5 22500
6 23400
7 30,000
8 29,000
9 21,000
10 18,000
11 14,000
12 11,000

COST
Ht Lt Wt Ot It St Ct Pt
Period # Hired # Laid off # Workfor Overtime Inventory Stockout SubcontraProduction
1 0 0 0 0 0 0 0 0
2 0 0 0 0 0 0 0 0
3 0 0 0 0 0 0 0 0
4 0 0 0 0 0 0 0 0
5 0 0 0 0 0 0 0 0
6 0 0 0 0 0 0 0 0
7 0 0 0 0 0 0 0 0
8 0 0 0 0 0 0 0 0
9 0 0 0 0 0 0 0 0
10 0 0 0 0 0 0 0 0
11 0 0 0 0 0 0 0 0
12 0 0 0 0 0 0 0 0

Total Cost = $ -

Total Revenue = $ 57,833,250

Profit = $ 57,833,250
Price WorkforceCapacity Inventory Over time

250 -250 0 -5000 0

250 0 0 -11000 0
250 0 0 -15000 0
247.50 0 0 -26700 0
250 0 0 -22500 0
250 0 0 -23400 0
250 0 0 -30000 0
250 0 0 -29000 0
250 0 0 -21000 0
250 0 0 -18000 0
250 0 0 -14000 0
250 0 0 -11000 0
Aggregate Plan Decision Variables
Ht Lt Wt Ot It St Ct Pt
Period # Hired # Laid off # Workfor Overtime Inventory Stockout SubcontraProductio Demand
0 0 0 250 0 5,000 0 0
1 10,000
2 11,000
3 15,000
4 18,000
5 25,000
6 26,000
7 30,000
8 29,000
9 21,000
10 18,000
11 14,000
12 11,000

COST
Ht Lt Wt Ot It St Ct Pt
Period # Hired # Laid off # Workfor Overtime Inventory Stockout SubcontraProduction
1 0 0 0 0 0 0 0 0
2 0 0 0 0 0 0 0 0
3 0 0 0 0 0 0 0 0
4 0 0 0 0 0 0 0 0
5 0 0 0 0 0 0 0 0
6 0 0 0 0 0 0 0 0
7 0 0 0 0 0 0 0 0
8 0 0 0 0 0 0 0 0
9 0 0 0 0 0 0 0 0
10 0 0 0 0 0 0 0 0
11 0 0 0 0 0 0 0 0
12 0 0 0 0 0 0 0 0

Total Cost = $ -

Total Revenue = $ 28,500,000

Profit = $ 28,500,000
Price WorkforceCapacity Inventory Over time

125 -250 0 -5000 0

125 0 0 -11000 0
125 0 0 -15000 0
125 0 0 -18000 0
125 0 0 -25000 0
125 0 0 -26000 0
125 0 0 -30000 0
125 0 0 -29000 0
125 0 0 -21000 0
125 0 0 -18000 0
125 0 0 -14000 0
125 0 0 -11000 0
 Aggregate Plan

1.2

0.8

Inventory
Production
0.6 Demand
Stockout
Subcontracting

0.4

0.2

0
1

Period