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four periods. (d) W hich plan would you recommend, and why? Standa indicate that

ID: 2339075 • Letter: F

Question

four periods. (d) W hich plan would you recommend, and why? Standa indicate that one worker can assemble five printers per day. This model costs about $350to and the company figures it costs $5 to hold one printer in inventory for one month. Wo S1500 per month and can be hired for $500 each: firing a worker costs' $750. Curre month. 5.10. X Print Manufacturing makes laser printers. One plant assembles the PL-4000 model, Stu Workers earn 12 workers in the assembly department.If a printer is backordered, the cost is $35 per uni Month Working Days 21 22 Demand July August September October November December Total 126 21 1020 950 x) 19 1250 20 650 1000 5670

Explanation / Answer

1) Chase method solution:

Month

Demand

Workers

Days

Production

Inv

B/O

Hire

Fire

12

50

0

July

1020

10

20

1000

30

0

2

August

950

10

20

1000

80

0

0

September

800

8

20

800

80

0

2

October

1000

10

20

1000

80

2

0

November

1250

12

20

1200

30

2

0

December

650

7

20

700

80

0

5

Total

57

5700

380

0

4

9

Cost: 2,091,150 or 96,150 (not inclusive of production cost)

Constant workforce method solution, when no backorders are allowed:

Month

Demand

Workers

Days

Production

Inv

B/O

Hire

Fire

12

50

0

July

1020

10

20

1000

30

0

2

August

950

10

20

1000

80

0

0

September

800

10

20

1000

280

0

0

October

1000

10

20

1000

280

0

0

November

1250

10

20

1000

30

0

0

December

650

10

20

1000

380

0

0

Total

60

6000

1080

0

0

2

Cost: 2,196,900 or 96,900 (not inclusive of production cost)

Constant workforce method solution, when backorders are allowed:

Month

Demand

Workers

Days

Production

Inv. Pos.

Inv

B/O

Hire

Fire

12

50

50

0

July

1020

10

20

1000

30

30

0

0

2

August

950

10

20

1000

80

80

0

0

0

September

800

10

20

1000

280

280

0

0

0

October

1000

10

20

1000

280

280

0

0

0

November

1250

10

20

1000

30

30

0

0

0

December

650

10

20

1000

380

380

0

0

0

Total

5670

60

6000

1080

1080

0

0

2

Cost: 2,196,900 or 96,900 (not inclusive of production cost)

Allowing backorders had no impact on the costs because we did not actually require to have any backorders with the plan. Thus at least with these specific production and demand numbers, allowing backorders had no gain

4)

Chase – shutdown in October

Month

Demand

Workers

Days

Production

Inv

B/O

Hire

Fire

12

50

0

July

1020

10

20

1000

30

0

2

August

950

10

20

1000

80

0

0

September

800

8

20

800

80

0

2

October

1000

12

16

960

40

4

0

November

1250

13

20

1300

90

1

0

December

650

6

20

600

40

0

7

Total

59

5660

360

0

5

11

Cost: 2,082,050 or $101,050 (not inclusive of cost of production )

Chase – shutdown in December

Month

Demand

Workers

Days

Production

Inv

B/O

Hire

Fire

12

50

0

July

1020

10

20

1000

30

0

2

August

950

10

20

1000

80

0

0

September

800

8

20

800

80

0

2

October

1000

10

20

1000

80

2

0

November

1250

12

20

1200

30

2

0

December

650

11

12

660

40

0

1

Total

61

5660

340

0

4

5

Cost: 2,079,950 or $98,950 (not inclusive of cost of production )

Constant Workforce with backorders – October

Month

Demand

Workers

Days

Production

Inv

B/O

Hire

Fire

12

50

0

July

1020

10

20

1000

30

0

2

August

950

10

20

1000

80

0

0

September

800

10

20

1000

280

0

0

October

1000

10

16

800

80

0

0

November

1250

10

20

1000

170

0

0

December

650

10

20

1000

180

0

0

Total

60

5800

650

170

0

2

Cost: 2,130,700 or $100,700 (not inclusive of cost of production )

Constant Workforce with backorders – December

Month

Demand

Workers

Days

Production

Inv

B/O

Hire

Fire

12

50

0

July

1020

11

20

1100

130

0

1

August

950

11

20

1100

280

0

0

September

800

11

20

1100

580

0

0

October

1000

11

20

1100

680

0

0

November

1250

11

20

1100

530

0

0

December

650

11

12

660

540

0

0

Total

66

6160

2740

0

0

1

Cost: 2,26,450 or $113,450 (not inclusive of cost of production )

Constant Workforce, no backorders - October

Month

Demand

Workers

Days

Production

Inv

B/O

Hire

Fire

12

50

0

July

1020

11

20

1100

130

0

1

August

950

11

20

1100

280

0

0

September

800

11

20

1100

580

0

0

October

1000

11

16

880

460

0

0

November

1250

11

20

1100

310

0

0

December

650

11

20

1100

760

0

0

Total

66

6380

2520

0

0

1

Cost: 2,345,350 or $112,350 (not inclusive of cost of production )

Constant Workforce, no backorders - December

Month

Demand

Workers

Days

Production

Inv

B/O

Hire

Fire

12

50

0

July

1020

11

20

1100

130

0

1

August

950

11

20

1100

280

0

0

September

800

11

20

1100

580

0

0

October

1000

11

20

1100

680

0

0

November

1250

11

20

1100

530

0

0

December

650

11

12

660

540

0

0

Total

66

6160

2740

0

0

1

Cost: 2,26,450 or $113,450 (not inclusive of cost of production )

When choosing the chase method, the December shutdown is better because the cost is lesser. However with either type of constant workforce method, the October shutdown cost is lesser. Moreover we had to change few parameter to satisfy the demand over the planning horizon. Thus would not simply shut down the plant and not allowed to make any adjustments

Month

Demand

Workers

Days

Production

Inv

B/O

Hire

Fire

12

50

0

July

1020

10

20

1000

30

0

2

August

950

10

20

1000

80

0

0

September

800

8

20

800

80

0

2

October

1000

10

20

1000

80

2

0

November

1250

12

20

1200

30

2

0

December

650

7

20

700

80

0

5

Total

57

5700

380

0

4

9