Please show all working out, thanks. Formulate a chase sales and operations plan

Question

Please show all working out, thanks.

Formulate a chase sales and operations plan for a company with the following predicted demand: Month 2 3 4 5 6 Total Demand 60,300 55,800 22,500 35,100 21,600 55,800 251,100 The beginning workforce is 205 employees. The monthly output per employee is 450 units. The cost to hire and lay off a worker are $1,500 and $5,500, respectively. The cost to carry an item in inventory for one month is estimated at $15, and the stockout cast is $45 per unit. Show the production schedule, the inventory levels, and the changes in workforce from period to period. Compute the plan's cost. Construct the chase sales and operations plan (enter your responses as whole numbers). Month 1 2 3 4 5 6 Total Demand 60,30055, 800 22,500 35,100 21.600 55,800 251.100 Production Production D D D D D D O

Explanation / Answer

Consider the below production schedule

Explanation :

The demand for the month 1 is 60300. The avaialble manpower in 205. Each employee can produe 450 units. So total production of units will be 205*450 = 92250. So the ending inventory will 92250-60300= 31950 units.

Now 31950 units available for month 2. Month 2 demand is 55800. So net production required = 55800-31950 units. = 23850 units. If 23850 units producted in month 2 then ending inventory will be 0. So the demand of 3rd month is needed to be filled. So the demand on 3rd month = 22500. So if 22500 produed in the month , then it will be sufficient to satisfy the demand. similarly for all the other months demand , and production quantities required are shown in above table.

Mapower planning. :

The re are 205 manpoer utilised in month 1. Now in month 2 , required production is only 23850. Each employee can produce only 450 units. So the total number of employees required to produe 23850 = 23850/450 = 53 employees. But 205 employees are avialble in month 1. So 205 - 53 = 152 employees are layed off in the month 2. Similarly the required production of 3rd month = 22500. The required number of employees are 22500/450= 50 . But 53 employees are avaible from month 2 . So the employees layed off in month 3 = 53-50 = 3. The demand for month 4 = 35100. THe employees required for the production = 35100/450 = 78. But only 50 employees avialable from month 3. So the employees added in month 4 = 78-50=28. similarly employees added or layed off in every month is calculated and shown in below table .

Cost of carrying 31950 units in month 1 = 31950 * $15 ( cost per unit of hodling) = $ 479250 .there are no units carried in rest of the months. So the total cost of carrying an inventory = $479250

Cost of stockout is 0 in all months as there is no stockout.

cost of adding an employee is $1500 per employee. COst of firing an employee = $5500.

So total cost of adding an employee in all months is calculated = $156000

Total cost of firing an employee in all months put together = $1017500

So total cost incurred on planning = $479250 ( cost of carrying ) + $156000( cost of adding employees) + $1017500( cost of firing employees) = $1652750

Month 1 2 3 4 5 6 Total Demand Demand 60300 55800 22500 35100 21600 55800 251100 Required Production 60300 23850 22500 35100 21600 55800 219150 production 92250 23850 22500 35100 21600 55800 251100 Balance Ending Inventory 31950 0 0 0 0 0

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