Given the following production plan calculate (a) chase production plan and (b)

Question

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 Chase Month Jan Feb Mar Apr May Jun Demand 5,200 5,100 5,400 5,700 5,400 5,600 Production Ending Inventory Workforce Level Month Jan Feb Mar Apr May Jun Demand 5,200 5,100 5,400 5,700 5,400 5,600 Production Ending Inventory Workforce

Explanation / Answer

(1) Chase Plan - manpower changes month to month as per requirement. Production planning is done keeping the minimum safety stock of 200 units month over month.

(2) Level Plan - manpower is kept 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 5200 5100 5400 5700 5400 5600 Production 5400 5100 5400 5700 5400 5400 Ending Inventory 200 400 400 400 400 400 200 Workforce 18 17 18 19 18 18

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