A Company Is Interested in Developing a Quarterly Aggregate Production

question 20

Essay

A company is interested in developing a quarterly aggregate production plan but they aren't sure if level capacity or matching demand would be better.They have the following information available regarding their production operation:
Number of working days per quarter = 65 days
Number of hours per day per person = 8 hours
Labor standard to produce one unit = 3 hours
Demand for four quarters respectively:
40,000, 42,000, 41,000, and 44,000 units
a.Using a level capacity plan, how many workers would be needed each quarter?
b.For a level capacity plan, what is the beginning inventory in quarter 2?
c.Using a level capacity plan, in how many quarters are the machine requirements over capacity?
d.Using a matching demand plan, how many workers are needed for quarter 1?
e.How many additional workers are needed in quarter 2 under a matching demand plan?

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Definitions:

Goal Specificity

The clarity and preciseness of a goal, which helps in planning and achieving desired outcomes by making expectations clear and measurable.

Theory X Manager

A management style characterized by the belief that employees inherently dislike work and must be closely supervised and coerced to achieve productivity.

Contract

Legally enforceable agreement between two or more parties regarding a specified act or thing.

Union Members

Individuals who belong to a labor union, an organization that represents workers in negotiations with employers regarding wages, benefits, and working conditions.