dolution

Sophisticated Skates produces a variety of inline roller skates. Management wants you to develop an aggregate plan for the next 7 months.

Cost Data (per unit)
	Regular time labor cost per unit	$9.60
	Overtime labor cost per unit	$14.40
	Hiring cost per unit	$2.00
	Firing cost per unit	$3.00
	Inventory holding cost per unit per period	$5.00
	Shortage cost per unit per period	$7.50
	Material cost per unit	$30.00
Capacity Data
	Previous month’s output	4500
	Beginning inventory (units)	2500
	Labor standard per unit (hours)	0.64
	Regular time hours available per period per employee	160
	Overtime hours available per period per employee	20
Demand Forecast
	November	3000
	December	6000
	January	2000
	February	1500
	March	4000
	April	5500
	May	8500

1. Develop an aggregate plan using a level production strategy, inventories, and back orders. What is the level production quantity for the plan? Calculate the total cost of the plan.
   1. How many workers are needed for the level plan?

1. Develop an aggregate plan using a chase production strategy. Change the production quantity each period to match that period’s level of demand. Calculate the total cost of the plan.
2. Compare the two plans. Propose a hybrid plan.

Given data:

Type of plan (level, chase, hybrid):

Regular Production cost =

Overtime Production cost =

Subcontract cost =

Inventory carrying cost per unit per period =

(Backorder or Lost sale) Shortage cost per unit per period =

Hiring cost =

Firing cost =

Beginning Inventory:					Beginning Workforce (by unit or empl):
Time period	Demand	Regular Production	Overtime	Subcontract Production	Ending Inventory	Backorder/ lost sale	Workers Required	Hire	Fire
November
December
January
February
March
April
May
Total:
Cost:
Total cost of plan:

1. Compare the two plans. Propose a hybrid plan.