Compute the aggregate production rate

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Reference no: EM13109554

The BackPack Company produces a line of backpacks. The manager, Jill Nicholas, has decided that the BackPack Company must have very good customer service.

She has asked you to develop a level aggregate plan using inventories but not back orders. All demand must be met each period. Use the following data to solve the problem:

Problem Data

Cost data
Regular-time labor cost per hour $10.00
Overtime labor cost per hour $15.00
Subcontracting cost per unit (labor only) $84.00
Holding cost per unit per period $10.00
Back-order cost per unit per period $20.00
Hiring cost per employee $600.00
Firing cost per employee $450.00

Capacity data
Beginning workforce 210 employees
Beginning inventory 400 units
Labor standard per unit 6 hours
Regular time available per period 160 hours
Overtime available per period 32 hours
Subcontracting maximum per period 1000 units
Subcontracting minimum per period 500 units

Demand data
Period 1 6000 units
Period 2 4800 units
Period 3 7840 units
Period 4 5200 units
Period 5 6560 units
Period 6 3600 units
You must:
A.) Calculate the aggregate production rate: ________ units
B.) Calculate the appropriate workforce given the aggregate production rate
C.) Show what would happen if this plan were implemented
D.) Calculate the costs of this plan
E.) Evaluate the plan in terms of cost, customer service, operations, and human resources.

Reference no: EM13109554

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