BUSN Math..Problem

Problem 11-5

 

Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must develop an aggregate plan given the forecast for engine demand shown in the table. The department has a normal capacity of 130 engines per month. Normal output has a cost of $60 per engine. The beginning inventory is zero engines. Overtime has a cost of $90 per engine.

 

 

	Month
	1	2	3	4	5	6	7	8	Total
Forecast	120	135	140	120	125	125	140	135	1,040

 

a.	Develop a chase plan that matches the forecast and compute the total cost of your plan. (Negative amounts should be indicated by a minus sign. Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.)

 

Period	1	2	3	4	5	6	7	8	Total
Forecast	120	135	140	120	125	125	140	135	1,040
Output
Regular
Overtime
Subcontract
Output – Forecast
Inventory
Beginning
Ending
Average
Backlog
Costs:
Output
Regular	$								$
Overtime
Subcontract
Inventory
Backorder
Total	$								$

 

b.

Compare the costs to a level plan that uses inventory to absorb fluctuations. Inventory carrying cost is $2 per engine per month. Backlog cost is $90 per engine per month. (Negative amounts should be indicated by a minus sign. Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.)

 

Period	1	2	3	4	5	6	7	8	Total
Forecast	120	135	140	120	125	125	140	135	1,040
Output
Regular
Overtime
Subcontract
Output – Forecast
Inventory
Beginning
Ending
Average
Backlog
Costs:
Output
Regular	$								$
Overtime
Subcontract
Inventory
Backorder
Total	$								$

 

Problem 11-6

 

Manager Chris Channing of Fabric Mills, Inc., has developed the forecast shown in the table for bolts of cloth. The figures are in hundreds of bolts. The department has a normal capacity of 275(00) bolts per month, except for the seventh month, when capacity will be 250(00) bolts. Normal output has a cost of $40 per hundred bolts. Workers can be assigned to other jobs if production is less than normal. The beginning inventory is zero bolts.

 

 

Month	1	2	3	4	5	6	7	Total
Forecast	250	300	250	300	280	275	270	1,925

 

a.	Develop a chase plan that matches the forecast and compute the total cost of your plan. Overtime is $60 per hundred bolts. (Negative amounts should be indicated by a minus sign. Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.)

 

Period	1	2	3	4	5	6	7	Total
Forecast	250	300	250	300	280	275	270	1,925
Output
Regular
Overtime
Subcontract
Output – Forecast
Inventory
Beginning
Ending
Average
Backlog
Costs:
Output
Regular	$							$
Overtime
Subcontract
Inventory
Backorder
Total	$							$

 

b.

Would the total cost be less with regular production with no overtime, but using a subcontractor to handle the excess above normal capacity at a cost of $50 per hundred bolts? Backlogs are not allowed. The inventory carrying cost is $2 per hundred bolts. (Round your Average values to 1 decimal place. Negative amounts should be indicated by a minus sign. Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.)

 

Period	1	2	3	4	5	6	7	Total
Forecast	250	300	250	300	280	275	270	1,925
Output
Regular
Overtime
Subcontract
Output – Forecast
Inventory
Beginning
Ending
Average
Backlog
Costs:
Regular	$							$
Overtime
Subcontract
Inventory
Backorder
Total	$							$

 

Hints

References

eBook & Resources

Problem 11-9

 

Wormwood, Ltd., produces a variety of furniture products. The planning committee wants to prepare an aggregate plan for the next six months using the following information:

 

 

	MONTH
	1	2	3	4	5	6
Demand	160	150	160	180	170	140
Capacity
Regular	150	150	150	150	160	160
Overtime	10	10	0	10	10	10

 

Cost Per Unit
Regular time	$50
Overtime	75
Subcontract	80
Inventory, per period	4

 

Subcontracting can handle a maximum of 10 units per month. Beginning inventory is zero. Develop a plan that minimizes total cost. No back orders are allowed. (Negative amounts should be indicated by a minus sign. Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.)

 

Period	1	2	3	4	5	6	Total
Forecast	160	150	160	180	170	140	960
Output
Regular	150	150	150	150	160	160	920
Overtime	10	10	0	10	10	10	50
Subcontract
Output- Forecast
Inventory
Beginning
Ending
Average
Backlog
Costs:
Regular	$						$
Overtime
Subcontract
Inventory
Backlog
Total	$						$

Problem 11-14

 

Refer to Example 3 in the textbook. Given the following information set up the problem in a transportation table and solve for the minimum-cost plan: (Omit the “$” sign in your response.)

 

 

	PERIOD
	1	2	3
Demand		550	700	750
Capacity
Regular		500	500	500
Overtime		50	50	50
Subcontract		120	120	100
Beginning inventory		100
Costs
Regular time	$	60 per unit
Overtime	$	80 per unit
Subcontract	$	90 per unit
Inventory carrying cost	$	1 per unit per month
Back-order cost	$	3 per unit per month

 

Minimum total cost

$

rev: 04_13_2015_QC

Problem 11-19

 

Prepare a master production schedule for industrial pumps in the manner of the following table. Use the MPS rule to “schedule production when the projected on-hand inventory would be less than 10 without production.” Suppose that a production lot size of 70 pumps is used. (Leave no cells blank – be certain to enter “0” wherever required.)

 

 

	June		July
64	1	2	3	4		5	6	7	8
Forecast	30	30	30	30		40	40	40	40
Customer orders (committed)	33	20	10	4		2
Projected on-hand inventory
MPS
ATP

 

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Problem 13-9

 

The Friendly Sausage Factory (FSF) can produce hot dogs at a rate of 5,000 per day. FSF supplies hot dogs to local restaurants at a steady rate of 250 per day. The cost to prepare the equipment for producing hot dogs is $66. Annual holding costs are 45 cents per hot dog. The factory operates 292 days a year.

 

 

a.	Find the optimal run size. (Do not round intermediate calculations. Round your answer to the nearest whole number.)

 

Optimal run size

 

b.	Find the number of runs per year. (Round your answer to the nearest whole number.)

 

Number of runs

 

c.	Find the length (in days) of a run. (Round your answer to the nearest whole number.)

 

Run length (in days)

 

Problem 13-13

 

A mail-order house uses 17,280 boxes a year. Carrying costs are 60 cents per box a year, and ordering costs are $96. The following price schedule applies.

 

 

Number of Boxes	Price per Box
1,000 to 1,999	$1.25
2,000 to 4,999	1.20
5,000 to 9,999	1.15
10,000 or more	1.10

 

a.	Determine the optimal order quantity. (Round your answer to the nearest whole number.)

 

Optimal order quantity

boxes

 

b.	Determine the number of orders per year. (Round your answer to 2 decimal places.)

 

Number of order

per year

 

Problem 13-17

 

A manager just received a new price list from a supplier. It will now cost $1.00 a box for order quantities of 801 or more boxes, $1.10 a box for 200 to 800 boxes, and $1.20 a box for smaller quantities. Ordering cost is $80 per order and carrying costs are $10 per box a year. The firm uses 3,600 boxes a year. The manager has suggested a “round number” order size of 800 boxes. The manager’s rationale is that with a U-shaped cost curve that is fairly flat at its minimum, the difference in total annual cost between 800 and 801 units would be small anyway. What order size would you recommend? (Round intermediate calculations to 2 decimal places and final answer to the nearest whole number.)

 

 

Recommended order size

 

Problem 13-18

 

A newspaper publisher uses roughly 860 feet of baling wire each day to secure bundles of newspapers while they are being distributed to carriers. The paper is published Monday through Saturday. Lead time is six workdays. What is the appropriate reorder point quantity, given that the company desires a service level of 95 percent, if that stockout risk for various levels of safety stock is as follows: 1,500 feet, .10; 1,700 feet, .05; 2,100 feet, .02; and 2,400 feet, .01?

 

 

Appropriate reorder point

ft

 

Problem 13-31

 

A drugstore uses fixed-order cycles for many of the items it stocks. The manager wants a service level of .98. The order interval is 12 days, and lead time is 3 days. Average demand for one item is 61 units per day, and the standard deviation of demand is 12 units per day. Given the on-hand inventory at the reorder time for each order cycle shown in the following table.

Use Table .

 

 

Cycle	On Hand
1	42
2	13
3	105

 

Determine the order quantities for cycles 1, 2, and 3: (Round your answers to the nearest whole number)

 

Cycle	Units
1
2
3

 

 

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