She has been asked to submit an production plan for the next calendar year. Each year Marl’s marketing and sales department produces a forecast of appliances by month for the next year, which the production planning department uses to plan production. The first step in the planning process is to construct an aggregate production plan, which consists of the planned gross production by month for the year but does not indicate numbers of specific appliance types, sizes or models to be made each month but is an aggregate as each type of appliance requires roughly similar materials and labor resources.
As the production periods approach later in the year, master production plans will be remunerated which would be specific regarding appliance type, model number etc. Linda therefore needs to make a decision on what would be the most suitable plan to keep costs at a minimum but also taking into consideration the feasibility of the plan. Primarily, the plan should involve keeping the total cost (equal to the sum of hiring costs, layoff costs, inventory costs and both regular and overtime labor costs) as low as possible.
It should also take into account other factors such as the fact that firing staff and hiring and training new employees brings its own headaches, especially in a emitted labor market such as exists in Stratford, as well as affecting union relations and employee morale. In addition, excessive overtime might lead to lower efficiency and restricted production could lead to poor work habits and low morale.
The plant has the physical capacity to produces only 13,000 appliances per month and currently employs 160 workers who work 40 hours a week and are expected to have an annual output of about 480 appliances next year. The monthly cost of employment to MR., including fringe benefits, is around $2,400 per month per worker and a worker-month of overtime costs them about $3,300. Additionally, the personnel department estimates that hiring, training and related expenses would amount to $1 ,800 per worker, whereas severance and other layoff expenses would cost a total of $1,200 per worker.
MR. also expect to have 240 finished units in inventory on to hold an appliance in inventory for a month during the next year. 2. 1 . Assumptions As we will be using a linear mathematical model that is a idealization of real life to obtain recommendations, we will explicitly state the simplifying assumptions and approximations made to allow us to use the model. A. We assume that the parameter values are know with certainty.
We assume that the following data are correct for every possible situation: ; The annual output per worker will be 480 appliances per year and no appliances need to be discarded ; The shipment forecast for every month is precise and reliable and the company will therefore not lose potential clients due to unexpected demand changes ; The master production plan is formulated correctly and has no additional implications for the aggregate plan ; There is no storage limit for the inventory ; There will be 240 units in inventory in the beginning of the next calendar year
The cost for storage will be $8 a month for each appliance ; The wage cost will be $2,400 for each worker ; The total hiring costs to employ a new working will be $1,800 for each new worker ; The total layoff costs will be $1,200 for each laid off worker ; A worker-month of overtime costs the company $3,300 ; There will be 160 workers employed at the start of the calendar year ; Workers will work 40 hours a week ; There will be no additional costs to take into account, such as fines, legal fees or time lost due to external or internal factors such as strikes. Potential new workers re available to the extent needed ; The required raw materials are readily available from regional resources on short notice ; No workers quit or miss work for extended lengths of time b. We assume that the returns to scale are constant We also assume that the returns to scale are constant within the range of possible values for the decision variables. The output of each worker is always 40 units per month, irrespective of hiring and layoffs ; A worker-month of overtime also yields 40 units every time, irrespective of other factors We assume that, although a different product mix will me made at different times of he year, there is no cost saving or extra cost involved due to product mix variations. In addition, we assume that overtime, hiring and firings do not affect performance or influence catheter in any way. 3. 1 .
Solution Approach We obtained three possible solutions, discussed further on, which are based on different approaches but not combining them. Therefore we should calculate the optimal solution, using certain constraints which we decide ourselves, in Excel using the solver and the Simplex ALP method. 4. 1. Results Three possible solutions were already suggested by Linda Metzger. In the first one (Exhibit 1), production level and workforce are held constant throughout the year at a level sufficient to meet the peak demand period.
Why Work with Us
Top Quality and Well-Researched Papers
We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.
Professional and Experienced Academic Writers
We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.
Free Unlimited Revisions
If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.
Prompt Delivery and 100% Money-Back-Guarantee
All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.
Original & Confidential
We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.
24/7 Customer Support
Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.
Try it now!
How it works?
Follow these simple steps to get your paper done
Place your order
Fill in the order form and provide all details of your assignment.
Proceed with the payment
Choose the payment system that suits you most.
Receive the final file
Once your paper is ready, we will email it to you.
No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.
No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.
Admission Essays & Business Writing Help
An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.
Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.
If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.