Business, 26.05.2021 03:00 toddbecca9

Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must develop an aggregate plan given the forecast for engine demand shown in the table. The department has a regular output capacity of 130 engines per month. Regular output has a cost of $60 per engine. The beginning inventory is zero engines. Overtime has a cost of $90 per engine. Month
1 2 3 4 5 6 7 8 Total
Forecast 120 135 140 120 125 125 140 135 1,040
a. Develop a chase plan that matches the forecast and compute the total cost of your plan. Regular production can be less than regular capacity. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.)
eriod 1 2 3 4 5 6 7 8 Total
Forecast 120 135 140 120 125 125 140 135 1,040
Output
Regular
Overtime
Subcontract
Output - Forecast
Inventory
Beginning
Ending
Average
Backlog
Costs:
Output
Regular
Overtime
Subcontract
Inventory
Backorder
Total
b. Compare the costs to a level plan that uses inventory to absorb fluctuations. Inventory carrying cost is $2 per engine per month. Backlog cost is $90 per engine per month. There should not be a backlog in the last month. Assume that using overtime is not an option. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.)
Period 1 2 3 4 5 6 7 8 Total
Forecast 120 135 140 120 125 125 140 135 1,040
Output
Regular
Overtime
Subcontract
Output - Forecast
Inventory
Beginning
Ending
Average
Backlog
Costs:
Output
Regular
Overtime
Subcontract
Inventory
Backorder
Total

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Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must develop an agg...

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