An aggregate plan is being developed for the next three periods using the transp

Question

An aggregate plan is being developed for the next three periods using the transportation method of aggregate planning. You start the period with 200 units in inventory. Other necessary information is provided in the table below. During period 1 you are allocated enough labor hours to product 600 units. The percent of those labor hours are is most nearly e. the utilization of your labor resource is most nearly)? Initial 200 units Period time contract Regular time $25/unit cost 1700 600 150 1000 Overtime cost $35/unit 700 650 100 1000 Subcontracting $50/unit cost $2 3 800 650100 1000 Carrying cost unit/period No back ordering is allowed 100% o 92% O 83% 67% @ None of the other answers are correct to within +/.2%

Explanation / Answer

The right answer is 83%

Actual units = 600

Total units = 700

Labor % utilization = 600/700 = 85% which is + 2%

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