Question

*Problem 1

The BackPack Company produces a line of backpacks. The manager, Jill Nicholas, is interested in using a level aggregate plan. Inventories and back orders will be used to handle demand fluctuations. She has asked you to develop such a plan. Use the following data to solve the problem: Problem Data Cost data Regular-time labor cost per hour $13.00 Overtime labor cost per hour $18.00 Subcontracting cost per unit (labor only) $85.00 Holding cost per unit per period $15.00 Back-order cost per unit per period $19.00 Hiring cost per employee $633.00 Firing cost per employee $479.00 Capacity data Beginning workforce 217employees Beginning inventory 445units Labor standard per unit 12hours Regular time available per period 160hours Overtime available per period 34hours Subcontracting maximum per period 1,070units Subcontracting minimum per period 520units Demand data Period 1 6,100units Period 2 4,910units Period 3 8,170units Period 4 5,610units Period 5 6,830units Period 6 3,660units

Your answer is correct. Calculate the aggregate production rate: 5806 units (Round your answer to 0 decimal places, the tolerance is +/-1.)

Your answer is correct. Calculate the appropriate workforce given the aggregate production rate: 436 employees (Round your answer to the nearest whole number, the tolerance is +/-1.)

Your answer is correct. Show what would happen if this plan were implemented. (If the answer is void please enter 0, do not leave any fields blank.) Period 1   2   3   4   5   6   Demand 6,100 4,910 8,170 5,610 6,830 3,660 Production 5806 5806 5806 5806 5806 5806 Ending inventory    445    151 1047 0 0 0 0 Back order 0 0 1317 1121 2145 1

Your answer is partially correct. Try again. Calculate the costs of this plan. (Round your answers to 0 decimal places. Do not round your intermediate computations to calculate regular-time labor cost.) Back order costs: $ 87096 Holding costs: $ Regular-time labor cost: $ Overtime cost: $ Hiring cost: $ Firing cost: $ Total cost: $

Your answer has been saved and sent to the instructor. See Gradebook for score details. Evaluate the plan in terms of cost, customer service, operations, and human resources.

Answer 1

(1) Aggregate production rate =  ( Demand - Begining Inventory ) / Number of periods

= (35280-445)/6

= 5805.83 = 5806 Units

(2) Workforce = Plan / ( Number of hours / hours per unit ) = (5806)/(160/12) = 435.45= 436 employees

(3)

There will be inventory in period1, 2, and stockout in rest of  the periods

(4) The cost of the plan is $5,684,973

Back Order cost =$87,096

Holding Cost = $17,970

Regular time labor cost=$5,441,280

Overtime cost =$0

Hiring Costs= $138,627

Layoff = $0

(5)

The Cost as per the plan is High due to stockout in four periods and inventory in two periods. Customer service is Average as demand has not fulfilled in 4 periods. Operation is also efficient as per the level production rate. In the Human resource aspect, it is average because of the significant cost incurred as a result of the hiring workforce for implementing the plan.

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