Posted: September 3rd, 2013
Aggregate requirement = (total requirements – opening inventory + closing inventory) / Number of periods.
Total requirement = 5000 + 10000 + 8000 + 2000 = 25000
Opening inventory = 1000
Closing inventory = 0
Number of periods = 4
Therefore, aggregate requirement = (25000 – 1000) / 4 = 6000 units
The total aggregate units required in each quarter are 6000 units. The overall units required at the end of the fourth period are 25000. The overall cost to produce 25000 units at the end of the fourth period is $319000.
According the answer above, the best strategy to use is the chase strategy. This is because the period is short. Secondly, there is no ending inventory. This means that only what is needed is produced. The set labour and demand is for the satisfaction of the periods demand only. Therefore, the best strategy to employ in above is chase strategy.
Question Two (a)
Orders that are not exceeding 135 units will be accepted because this is what the company has promised and able to deliver to the customers. However, for those orders that exceed 135 units, it would not possible for the customers since there are no more units. In this case, an MPS should be introduced to cater for the excess orders of more than 180 units.
|Project available balance 180||40||70||120||160|
Question Three (a)
|Item||Scheduled Receipts||Projected Available||Lead time||Lot size|
|Y||80 – week 3||30||1 week||LFL|
|C||210 – week 2||70||1 week||210|
|Item||Scheduled Receipts||Projected Available||Lead Time||Lot Size|
|C||20 – week 4||10||1 week||LFL|
|D||100 – week 3||150||1 week||LFL|
|E||500 – week 2||200||1 week||LFL|
|Boston Distribution Center||1||2||3||4||5||6|
|Projected on-hand delivery 10||45||25||60||5||5||5|
|Planned order releases||20||0||55||0||0||0|
|Denver distribution Center||1||2||3||4||5||6|
|Projected on-hand delivery 15||15||6||7||18||29||9|
|Planned order releases||20||10||0||0||20||0|
|Houston Distribution Center||1||2||3||4||5||6|
|Projected on-hand delivery 20||10||10||70||25||25||25|
|Planned order releases||0||0||45||0||0||0|
|Las Vegas Central Warehouse||1||2||3||4||5||6|
|Projected on-hand delivery 50||24||9||18||7||7||7|
|Planned order releases||11||95||11||11||0||0|
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