Develop a Chase Aggregate Plan Without Inventory and Back Orders

question 54

Essay

Develop a chase aggregate plan without inventory and back orders. Use no undertime or subcontracting. When demand exceeds regular plus maximum overtime production, hire enough employees to meet demand, working as much overtime as possible. When demand is less than regular time production, fire just enough workers to avoid undertime (you may then use a minimal amount of overtime to get production back up to demand) (data given above).
(a) What is the workforce at the end of the last period? How many total were hired? How many total were fired?
(b) How many total units were produced using overtime?
(c) What is the total cost?
(d) What is the cost per unit?

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Definitions:

Fixed Cost

Costs that do not vary with the production volume or level of services provided, such as rent, salaries, and insurance.

Salary

Salary refers to a fixed regular payment, typically paid on a monthly or biweekly basis but often expressed as an annual sum, made by an employer to an employee.

Incremental Manufacturing Cost

The additional cost incurred to produce an extra unit of a product, reflecting only those costs that directly change with the level of production.

Production

Production involves the processes and methods used to transform raw materials or components into finished goods or services.