Smart Manufacturing Company (SMC) manufactures a variety of products other than the drum components for printers. Their high selling mobile juicer cup JG-142 has the following expected demand sales figures (in units) over the coming six months: Month 2 4 5 Expected Demand (units) 17680 23040 21120 16640 21760 The following planning parameters apply: Planning Parameters 26 4 units/hour Current number of workers Output rate per worker Number of regular time hours Number of working days Regular time labour cost Overtime labour cost Maximum overtime hours allowed Hiring cost (including training) Layoff cost Inventory carrying cost Backorder cost Opening inventory Planned ending inventory (end of month 6) Material Cost Subcontracting Cost with material Maximum subcontracting allowed 6 18300 Total 118540 8 hours/day 20 days/month $14.00 /hour $21.00 /hour 20% of regular worker-hours/month $950 /worker $1780 /worker $1.75 /unit/month $7.00/unit backordered 400 units 900 units $15 /unit $35 /unit 60% of the actual units produced by workforce Answer the following questions independently: Develop aggregate production plans and calculate the relevant costs using the following strategies. Assume that hired workers will work from the first day of the hiring month and laid-off workers will stop working on the first day of the month. Show the resulting aggregate production plan and the corresponding relevant costs using the worksheet format available on eClass. (a) Plan A: SMC wants to develop a level production plan for this mobile juicer cup JG-142 in order to meet the demand and planned ending inventory. (b) Plan B: SMC wants to develop a chase production plan for this mobile juicer cup JG-142 in order to meet the demand and planned ending inventory. (c) Based on the total cost, which plan do you recommend A or B, why?
Smart Manufacturing Company (SMC) manufactures a variety of products other than the drum components for printers. Their high selling mobile juicer cup JG-142 has the following expected demand sales figures (in units) over the coming six months: Month 2 4 5 Expected Demand (units) 17680 23040 21120 16640 21760 The following planning parameters apply: Planning Parameters 26 4 units/hour Current number of workers Output rate per worker Number of regular time hours Number of working days Regular time labour cost Overtime labour cost Maximum overtime hours allowed Hiring cost (including training) Layoff cost Inventory carrying cost Backorder cost Opening inventory Planned ending inventory (end of month 6) Material Cost Subcontracting Cost with material Maximum subcontracting allowed 6 18300 Total 118540 8 hours/day 20 days/month $14.00 /hour $21.00 /hour 20% of regular worker-hours/month $950 /worker $1780 /worker $1.75 /unit/month $7.00/unit backordered 400 units 900 units $15 /unit $35 /unit 60% of the actual units produced by workforce Answer the following questions independently: Develop aggregate production plans and calculate the relevant costs using the following strategies. Assume that hired workers will work from the first day of the hiring month and laid-off workers will stop working on the first day of the month. Show the resulting aggregate production plan and the corresponding relevant costs using the worksheet format available on eClass. (a) Plan A: SMC wants to develop a level production plan for this mobile juicer cup JG-142 in order to meet the demand and planned ending inventory. (b) Plan B: SMC wants to develop a chase production plan for this mobile juicer cup JG-142 in order to meet the demand and planned ending inventory. (c) Based on the total cost, which plan do you recommend A or B, why?
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
Related questions
Question
Transcribed Image Text:Smart Manufacturing Company (SMC) manufactures a variety of products other than the drum components for
printers. Their high selling mobile juicer cup JG-142 has the following expected demand sales figures (in units)
over the coming six months:
Month
2
3
4
5
Expected Demand (units) 17680 23040 21120 16640 21760
The following planning parameters apply:
Current number of workers
Output rate per worker
Number of regular time hours
Number of working days
Regular time labour cost
Overtime labour cost
Planning Parameters
26
4 units/hour
8 hours/day
20 days/month
Maximum overtime hours allowed
Hiring cost (including training)
Layoff cost
Inventory carrying cost
Backorder cost
Opening inventory
Planned ending inventory (end of month 6)
Material Cost
Subcontracting Cost with material
Maximum subcontracting allowed
$14.00 /hour
$21.00 /hour
6
18300
20% of regular worker-hours/month
$950 /worker
$1780 /worker
$1.75 /unit/month
Total
118540
$7.00/unit backordered
400 units
900 units
$15 /unit
$35 /unit
60% of the actual units produced by workforce
Answer the following questions independently:
Develop aggregate production plans and calculate the relevant costs using the following strategies.
Assume that hired workers will work from the first day of the hiring month and laid-off workers will
stop working on the first day of the month.
Show the resulting aggregate production plan and the corresponding relevant costs using the
worksheet format available on eClass.
(a) Plan A: SMC wants to develop a level production plan for this mobile juicer cup JG-142 in
order to meet the demand and planned ending inventory.
(b) Plan B: SMC wants to develop a chase production plan for this mobile juicer cup JG-142 in
order to meet the demand and planned ending inventory.
(c) Based on the total cost, which plan do you recommend A or B, why?
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