14.10 Chapter Problems
Chapter Problems
- A company has the following demand forecast for the next six months:
| Month | 1 | 2 | 3 | 4 | 5 | 6 |
| Demand (Units) | 1200 | 1500 | 1800 | 1600 | 1400 | 1300 |
The company also provides the following operational data:
- Regular production capacity: 1400 units/month
- Regular time cost: $12/unit
- Overtime cost: $18/unit
- Inventory holding cost: $3/unit/month
- Hiring cost: $300/worker
- Layoff cost: $400/worker
Develop an aggregate plan using the chase strategy, level strategy, and a mixed strategy. Calculate the total cost for each strategy and recommend the most suitable option based on cost and operational considerations.
- Explain how linear programming can be applied to aggregate planning. Formulate a basic linear programming model for a production planning problem, including an objective function and constraints.
- Describe the transportation model. How can it be used to optimize resource allocation in aggregate planning across multiple time periods?
- What is the Management Coefficient Model? How does it integrate historical data and managerial judgment in workforce planning?
- A company wants to use the Management Coefficient Model to plan its workforce for the next four months. Historical data is provided below:
| Month | 1 | 2 | 3 | 4 | 5 | 6 |
| Demand (Units) | 1000 | 1200 | 1500 | 1300 | 1100 | 900 |
| Workforce (Employees) | 60 | 70 | 80 | 75 | 65 | 55 |
- The company’s forecasted demand for the next four months is:
| Month | 7 | 8 | 9 | 10 |
| Demand (Units) | 1400 | 1600 | 1300 | 1100 |
Use the Management Coefficient Model to estimate the required workforce for each of the next four months.
- What are decision rules in the context of aggregate planning? Discuss how they are used to guide production and workforce decisions under uncertainty.
- Discuss the unique considerations for aggregate planning in service organizations. How do factors such as non-inventoriable services and customer sensitivity to delays influence planning decisions?
