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Aggregate Production Example

Aggregate Production Example. From the following information prepare aggregate plan using: 1- Pure Chase Strategy 2- Pure Level Strategy. 3- Minimum Workforce with Subcontracting. Which is the best plan (calculate costs)?. DEMAND, WORKING DAYS PER MONTH. COST INFORMATION.

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Aggregate Production Example

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  1. Aggregate Production Example

  2. From the following information prepare aggregate plan using: 1- Pure Chase Strategy 2- Pure Level Strategy. 3- Minimum Workforce with Subcontracting. • Which is the best plan (calculate costs)?

  3. DEMAND, WORKING DAYS PER MONTH

  4. COST INFORMATION

  5. BEGINNING INVENTORY, CURRENT WORKERS

  6. 1- Pure Chase Strategy

  7. 1- Pure Chase Strategy

  8. CHASE STRATEGY REQUIRED CALCULATIONS – REQUIRED WORKERS

  9. 1- Pure Chase Strategy Cost($)

  10. 2- Pure Level Strategy

  11. 2- Pure Level Strategy

  12. LVEL STRATEGY REQUIRED CALCULATIONS – WORKERS REQUIRED • Total net demand =8000- 400= 8000 units • Total working days (6 months)= 125 DAYS • Required workers= total net demand* time required to produce a unit Total working days* daily working hours per day 8000*5/(125*8) = 40 workers Or Daily production = 8000/ 125= 64 units Units produced= Daily production * working days per month Jan= 64 units*22 days= 1408 units

  13. LVEL STRATEGY REQUIRED CALCULATIONS UNITS PRODUCED

  14. 2- Pure Level Strategy Cost($)

  15. 3- Minimum Workforce with Subcontracting

  16. 3- Minimum Workforce with Subcontracting

  17. 3- Minimum Workforce with Subcontracting • SUBCONTRACT+ UNITS PRODUCED = REQUIRED PRODUCTION • Minimum Workforce = (APRIL DEMAND ((LOWEST)) :- • 900*5/ (21 DAYS* 8 HOURS) = 26.8 = 27 WORKERS.

  18. 3- Minimum Workforce withSubcontracting- CALCULATING UNIT PRODUCED

  19. 3- Minimum Workforce withSubcontracting- - HOW INVENTORY RESULTS IN APRIL? • AFTER CALCULATING UNITS PRODUCED, WE SEE THAT IN PRODUCTION IN THIS MONTH IS MORE THAN DEMAND (907-900), SO THE DIFFERENCE (7 UNITS ONLY) IS THE MONTHLY INVENTORY.

  20. 3- Minimum Workforce with Subcontracting-COST($)

  21. Which is the best plan ?

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