Assume the forecasted monthly demand for the planning horizon of the first quart

Question

Assume the forecasted monthly demand for the planning horizon of the first quarter of next year is (840,927,768) for Jan, Feb, Mar. The beginning inventory for Jan and the ending inventory for Mar is 139. Aggregate planning production plan strategies are being considered for the first quarter of next year. Q1 For cash plan, the average inventory for the first quarter is. Q2. for level plan, the production for Feb is. Q3. For the basic model at Economic Order Quantity, if SS = 0, then TCC is? Q4 which of the LPs have extreme point but no optimal solution.

Explanation / Answer

Q1 For cash plan, the average inventory for the first quarter is.

In chase plan the actual production = forecasted demand, thus there are no ending inventory and beginning inventory for planned months.

For the given quarter, B.I = 139 and E.I = 139

Average inventory = (B.I + E.I)/2 = (139 +139)/2 = 139 units

Average inventory for 1sty quarter is 139 units

Q2. for level plan, the production for Feb is.

Month

Actual Required

Jan

840 – 139 = 701

Feb

927

Mar

768 + 139 = 907

Average Demand for 1 st Q = (701 + 927 + 907)/3 = 845 units

According to level strategy actual production will be constant = 845 units

For Level plan, production for Feb. = 845 units

Note: For Q3 and Q4 Please provide more details

Month

Actual Required

Jan

840 – 139 = 701

Feb

927

Mar

768 + 139 = 907

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