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Case Study on Cool Engineering Company – Aggregate Planning Assignment Answer
If You Need Technology & Engineering – A Case Study Aggregate Planning Questions? Aggregate planning refers to developing, maintaining, and analyzing the approximate scope of a company’s operations. Casestudyhelp.com provides Engineering Assignment Help & IT Assignment Services at the best price. Hire Professional MBA/PhD Writer.
Cool Engineering Company has asked you and your team to develop an aggregate plan for January through June for its refrigerator production based on the following data:
Holding cost RM8/ refrigerator /month
Subcontracting RM80/ refrigerator
Regular-time labor RM12/hour
Overtime labor RM18/hour for hours above
Hiring cost RM40/ worker
Layoff cost RM80/ worker
Stock-out cost RM60/refrigerator
Current workforce (December) 8 people
Labor hours/ refrigerator 4 hours
Workdays/month 20 days
Beginning inventory 250 refrigerators
What will each of the following strategies cost?
Plan I: Vary the workforce so that production meets the forecasted demand. Cool Engineering had eight employees in December.
Plan II: Vary overtime only and use a constant workforce of ten.
Plan III: Vary overtime and allowing stock-out and use a constant workforce of ten
Plan IV: Vary overtime and subcontracting
The objective is to choose the plan that has the lowest cost. Which plan is best and why?