exhibit 1
Level production to meet peak demand
month december january february march
production plan
shipment forecast 4400 4400 6000
production plan 8440 8440 8440
shipments 4400 4400 6000
inventory 240 4280 8320 10760
extraordinary labor cost
number of workers 160 211 211 211
hirings 51 0 0
layoffs 0 0 0
workers month overtime 0 0 0
cost of alternative 1 cost quantity total
hirings cost $ 1,800 51 $ 91,800 layoffs cost $ 1,200 0 $ - inventory holding cost $ 8 75000 $ 600,000 labor cost
regular $ 2,400 2532 $ 6,076,800 overtime $ 3,300 0 $ - $ 6,768,600
april may june july august septemberoctober november 8000 6600 11800 13000 11200 10800 7600 6000 8440 8440 8440 8440 8440 8440 8440 8440 8000 6600 11800 13000 11200 10800 7600 6000 11200 13040 9680 5120 2360 0 840 3280 211 211 211 211 211 211 211 211 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
december totals 5600 95400 8440 101280 5600 95400 6120 75000 211 2532 0 51 0 0 0 0
exhibit 2
Chase production plan with constant workforce and overtime
month december january february march
production plan
shipment forecast 4400 4400 6000
production plan 4160 4400 6000
shipments 4400 4400 6000
inventory 240 0 0 0
extraordinary labor cost
number of workers 160 199 199 199
hirings 39 0 0
layoffs 0 0 0
workers month overtime 0 0 0
cost of alternative 1 cost quantity total
hirings cost $ 1,800 39 $ 70,200 layoffs cost $ 1,200 0 $ - inventory holding cost $ 8 0 $ - labor cost
regular $ 2,400 2388 $ 5,731,200 overtime $ 3,300 375 $ 1,237,500 $ 7,038,900
april may june july august septemberoctober november 8000 6600 11800 13000 11200 10800 7600 6000 8000 6600 11800 13000 11200 10800 7600 6000 8000 6600 11800 13000 11200 10800 7600 6000 0 0 0 0 0 0 0 0 199 199 199 199 199 199 199 199 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 96 126 81 71 0 0 7960
december totals 5600 95400 5600 95160 5600 95400 0 0 199 2388 0 39 0 0 0 375
exhibit 3
Chase production plan with varying workforce
month december january february march
production plan
shipment forecast 4400 4400 6000
production plan 4160 4400 6000
shipments 4400 4400 6000
inventory 240 0 0 0
extraordinary labor cost
number of workers 160 104 110 150
hirings 0 6 40
layoffs 56 0 0
workers month overtime 0 0 0
cost of alternative 1 cost quantity total
hirings cost $ 1,800 256 $ 460,800 layoffs cost $ 1,200 276 $ 331,200 inventory holding cost $ 8 0 $ - labor cost
regular $ 2,400 2379 $ 5,709,600 overtime $ 3,300 0 $ - $ 6,501,600
april may june july august septemberoctober november 8000 6600 11800 13000 11200 10800 7600 6000 8000 6600 11800 13000 11200 10800 7600 6000 8000 6600 11800 13000 11200 10800 7600 6000 0 0 0 0 0 0 0 0 200 165 295 325 280 270 190 150 50 0 130 30 0 0 0 0 0 35 0 0 45 10 80 40 0 0 0 0 0 0 0 0
december totals 5600 95400 5600 95160 5600 95400 0 0 140 2379 0 256 10 276 0 0
exhibit 4
Aggregate plan for macpherson refrigeration limited
month december january february march
production plan
shipment forecast 4400 4400 6000
production plan 8000 8000 8000
shipments 4400 4400 6000
inventory 240 3840 7440 9440
extraordinary labor cost
number of workers 160 200 200 200
hirings 40 0 0
layoffs 0 0 0
workers month overtime 0 0 0
cost of alternative 1 cost quantity total
hirings cost $ 1,800 139 $ 250,200 layoffs cost $ 1,200 0 $ - inventory holding cost $ 8 11680 $ 93,440 labor cost
regular $ 2,400 2528 $ 6,067,200 overtime $ 3,300 0 $ - $ 6,410,840
inventory no problem because low cost
overtime allow, but in a little because lead to inefficiency hiring/layoff not allow, because it is complicated
april may june july august 8000 6600 11800 13000 11200 8000 8000 8000 8000 9160 8000 6600 11800 13000 11200 9440 10840 7040 2040 0 200 200 200 200 229 0 0 0 29 70 0 0 0 0 0 0 0 0 0 0 assumption
there's no overtime, and layoff hiring 40 worker in the beginning
all the production plan is in the maximal capacity (constant) remain inventory is no problem
result
the production plan excees the shipment or forecast create a big inventory in the ending
there's no cost for overtime and layoff
allow, but in a little because lead to inefficiencycost for hiring only in the beginning, for 40 worker only compare
total production plan total cost total inventory exhibit 1 101280 $ 6,768,600 75000
exhibit 2 95160 $ 7,038,900 0
exhibit 3 95160 $ 6,501,600 0
september october november december totals 10800 7600 6000 5600 95400 11960 8000 8000 8000 101120 10800 7600 6000 5600 95400 1160 1560 3560 5960 11680 299 200 200 200 2528 0 0 0 0 139 0 0 0 0 0 0 0 0 0 0 total overtime
0 largest production, larger inventory, and quite expensive 375 smaller production, many overtime, and the most expensive
0 smaller production, no inventory, no overtime, and quite expensive 0 larger production, large inventory, no overtime
largest production, larger inventory, and quite expensive efficiency, but create the largest inventory, and the cost is more expensive smaller production, many overtime, and the most expensive not efficiency because of overtime
smaller production, no inventory, no overtime, and quite expensive efficiency but still more expensive
