Reference no: EM131683635

Question 1 - Mixed Plan: Using the M&B case, what are the main, non-financial advantages with the mixed plan?

Question 2 - Better Plan: With the M&B case, what is meant by a "better plan"? What criteria and assumptions are we making in constructing the various plans?

M&B Case:

You have been asked by M&B Manufacturing to help them complete an aggregate plan and determine quantity discounts for their lawn and garden equipment. After talking with several managers, you collect the following info:

-There are 10 regular production employees; employees can produce 100 units per period. Regular production costs are $10/unit.

-There is currently no second shift, but one can be added. There is room for 6 additional regular production employees. Second shift production costs are $12/unit.

-There are only 5 employees that can work overtime and they can each produce 100 units per period. Overtime costs are $15/unit.

-The cost to hire a new employee is $1000 and the cost to layoff an employee is $500.

-There are 200 units in finished inventory at the beginning of period 1.

-Inventory holding costs are assessed against ending inventory at $20 per unit per period.

M&B provides a high service level to its customers, so shortages and backorders are not allowed.