Prepare aggregate plan for the product

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Reference no: EM132269511

You own a production facility for which you have to prepare an aggregate plan for the Product A. Develop a 6-month production plan for your facility using the transportation method.

The forecasted demand for Product A for months January to June is as follows:

January = 1000; February = 1200; March = 1250, April = 1450; May = 1400; and June = 1300.

Cost data are as follows:

Regular time cost per unit (January - April) - $12.00; Regular time cost per unit (May - June) - $11.00

Overtime cost per unit (during entire period) - $16.00;

Cost of procuring from outside per unit - $18.50;

Carrying cots per unit per month - $1.00.

You will begin the new year with no inventory left over from the previous year. In addition, backorders are not permitted.

You know the capacity (during regular hours) for producing product A will remain constant at 800 during January - April and then will increase to 1100 units per month during May - June.

Overtime capacity is set at 300 units per month during January - April, after that it will increase to 400 units per month for May - June.

A local supplier is available as a backup source to meet demand, but can provide only 500 units total during the 6-month period.

Reference no: EM132269511

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