26) An aggregate plan is being developed for the next three periods using the tr
ID: 375303 • Letter: 2
Question
26) An aggregate plan is being developed for the next three periods using the transportation method of aggregate planning. You start the period with 100 units in inventory. Other necessary information is provided in the table below. In the optimal solution how many units are produced with overtime in period 2?
Period
Units
Regular Time
Over-
time
Sub-
contract
Initial inventory Regular time cost
100 units
$25/unit
1
700
500
125
1000
Overtime cost
$30/unit
2
500
500
125
1000
Subcontracting cost
$40/unit
3
800
500
125
1000
Carrying cost
$2/unit/period
No back ordering is allowed
0 units
50 units
100 units
*125 units
None of the other answers are correct
Period
Units
Regular Time
Over-
time
Sub-
contract
Initial inventory Regular time cost
100 units
$25/unit
1
700
500
125
1000
Overtime cost
$30/unit
2
500
500
125
1000
Subcontracting cost
$40/unit
3
800
500
125
1000
Carrying cost
$2/unit/period
No back ordering is allowed
Explanation / Answer
The optimal Plan:
Therefore the units produced with overtime in period 2 are 0 units.
Period 1 2 3 Total Forecast 700 500 800 2000 Beginning Inventory 100 0 0 100 Regular Production 500 500 500 1500 Overtime Production 100 0 125 225 Subcontracting 0 0 175 175 Total Production (Regular + Overtime + Subcontracting) 600 500 800 1900 Ending Inventory 0 0 0 0 Ending Backorders 0 0 0 0Related Questions
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