Use level aggregate plan for the electric motor

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Reference no: EM131651273

You have decided you will use a level aggregate plan for the electric motor, meaning that you will manufacture the same number of units each month. ABC's president has told you that some customers order this motor well in advance of when needed, and thus it is allowable to have backorders, if needed. You know there are currently 150 units in inventory (starting inventory = SI), and ABC's marketing manager estimates that the demand for the motor (in units) for each of the next six months (M = 6) will be 240, 225, 265, 270, 260, and 275 (D1, D2, D3, D4, and D5 respectively). You have decided you would like to reduce average inventory level of several products (including this one), and you want to have 50 units in inventory six months from now (ending inventory = EI). Use this ABC Manufacturing scenario to complete the following: Provide the algebraic equation for the monthly aggregate production rate (APR, using SI, EI, D1, D2, D3, D4, D5, and M as variables). Calculate and provide the numerical monthly aggregate production rate rounded to a whole number.

Reference no: EM131651273

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