Reference no: EM13859196

Problem 1: Develop a production aggregate plan and calculate the corresponding cost, given the following forecast:

Month	1	2	3	4	5	6
Forecast	380	400	420	440	460	480

Use steady regular output of 400 units per month, use overtime as needed for up to 40 units per month, and use subcontracting to make up any needed output to match the forecast. Assume that no backorder is allowed. Hint: compare all possible production plans and select the best with the lowest total cost.

Unit costs are: Regular output = $25/unit, Overtime = $40/unit, Subcontract = $60/unit, Inventory cost = $15/unit/average inventory.

Problem 2: Eighty units of end item E are needed at the beginning of week 6. There cases (30 units per case) of J have been ordered. One case of J is scheduled to arrive in week 3, and one case of J is scheduled to arrive in week 4. There are 60 units of B and 20 units of J now on hand. Lead times are two weeks for E and B, and one week for J. J must be ordered by the case. Prepare a material requirements plan for component J. Hint: One has to sum up the requirements for both Js in the structure below.