1. Given the following production plan calculate (a) chase production plan and (

Question

1. Given the following production plan calculate (a) chase production plan and (b) level production plan. Compute the monthly production, ending inventory/ (backlog), and workforce levels. (5 points each)

• A worker will produce 300 units per month.

• Beginning inventory for January is 200 units which is the company’s safety stock level.

• The company wants to end June as close to the safety stock level of inventory as possible

Calculate for (1) Chase production, and then another for (2) Level production

Month Jan Feb Mar Apr May June Demand 5200 5100 5400 5700 5400 5600 Production Ending Inventory Workforce

Explanation / Answer

Jan Month demand is adjusted taking in to account the beginning inventory of 200 units.

(1) Chase Plan - manpower changes month to month as per requirement

(2) Level Plan - manpower remains constant. Manpower is calculated by dividing the Averaging monthly demand by labor standard of 300 units per

Month Jan Feb Mar Apr May June Demand 5000 5100 5400 5700 5400 5600 Production 5100 5100 5400 5700 5400 5700 Ending Inventory 100 100 100 100 100 200 Workforce 17 17 18 19 18 19

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