Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers

Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must develop an aggregate plan given the forecast for engine demand shown in the table. The department has a normal capacity of 130 engines per month. Normal output has a cost of $60 per engine. The beginning inventory is zero engines. Overtime has a cost of $90 per engine.

Month
1    2    3    4    5    6    7    8    Total
Forecast    120    135    140    120    125    125    140    135    1,040

a. Develop a chase plan that matches the forecast and compute the total cost of your plan. (Negative amounts should be indicated by a minus sign. Leave no cells blank – be certain to enter “0″ wherever required. Omit the “$” sign in your response.)

b. Compare the costs to a level plan that uses inventory to absorb fluctuations. Inventory carrying cost is
$2 per engine per month. Backlog cost is $90 per engine per month. (Negative amounts should be indicated by a minus sign. Leave no cells blank – be certain to enter “0″ wherever required. Omit the “$” sign in your response.)

Here’s the SOLUTION

This entry was posted in Homework Help. Bookmark the permalink.

Comments are closed.