Nowjuice, Inc., produces Shakewell® fruit juice. A planner has developed an aggr
ID: 469766 • Letter: N
Question
Nowjuice, Inc., produces Shakewell® fruit juice. A planner has developed an aggregate forecast for demand (in cases) for the next six months.
Use the following information to develop aggregate plans.
Develop an aggregate plan using each of the following guidelines and compute the total cost for each plan.
Use level production. Supplement using overtime as needed. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Use a combination of overtime (500 cases per period maximum), inventory, and subcontracting (500 cases per period maximum) to handle variations in demand. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Use overtime up to 750 cases per period and inventory to handle variations in demand. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Omit the "$" sign in your response.)
Nowjuice, Inc., produces Shakewell® fruit juice. A planner has developed an aggregate forecast for demand (in cases) for the next six months.
Explanation / Answer
Regular Prod. + OT
Period
May
Jun
Jul
Aug
Sep
Oct
Total
Forecast
4,000
4,800
5,600
7,200
6,400
5,000
33,000
Output
Regular
5000
5000
5000
5000
5000
5000
30000
Overtime
0
0
0
1600
1400
0
3000
Output - Forecast
1000
200
-600
-600
0
0
Inventory
Beginning
0
1000
1200
600
0
0
Ending
1000
1200
600
0
0
0
Average
500
1100
900
300
0
0
Backlog
Costs:
Regular
$7
$35,000
$35,000
$35,000
$35,000
$35,000
$35,000
$210,000
Overtime
$18
$0
$0
$0
$28,800
$25,200
$0
$54,000
Inventory
$1
$500
$1,100
$900
$300
$0
$0
$2,800
Back orders
Total
$35,500
$36,100
$35,900
$64,100
$60,200
$35,000
$266,800
Total Cost of Planning = $266,800
Note: OT Prod. Req. = Total Demand – total Regular production = 33,000 – 30000 = 3000
Output forecast = (Regular prod. + OT prod) – Demand
Ending Inventory = (Beginning inv. + Regular prod. + OT prod) – Demand
To avoid backlog utilize OT production
Regular + OT (500) + Subcontract (500)
Period
May
Jun
Jul
Aug
Sep
Oct
Total
Forecast
4,000
4,800
5,600
7,200
6,400
5,000
33,000
Output
Regular
5000
5000
5000
5000
5000
5000
30000
Overtime
500
500
500
500
500
0
2500
Subcontract
0
0
0
0
500
0
500
Output - Forecast
1,500
700
-100
-1,700
-400
0
Inventory
Beginning
0
1,500
2,200
2,100
400
0
Ending
1,500
2,200
2,100
400
0
0
Average
750
1850
2150
1250
200
0
Backlog
Costs:
Regular
$7
$35,000
$35,000
$35,000
$35,000
$35,000
$35,000
$210,000
Overtime
$18
$9,000
$9,000
$9,000
$9,000
$9,000
$0
$45,000
Subcontract
$39
$0
$0
$0
$0
$19,500
$0
$19,500
Inventory
$1
$750
$1,850
$2,150
$1,250
$200
$0
$6,200
Back orders
$0
$0
$0
$0
$0
$0
$0
$0
Total
$44,750
$45,850
$46,150
$45,250
$63,700
$35,000
$280,700
Note: OT Prod. + Subcontracting Req. = Total Demand – total Regular production = 33,000 – 30000 = 3000
To avoid backlog in month of Sep. Subcontracting is planned.
Output forecast = (Regular prod. + OT prod + Subcontract) – Demand
Ending Inventory = (Beginning inv. + Regular prod. + OT prod + subcontract) – Demand
Total Cost = $280,700
Regular + OT (750)
Period
May
Jun
Jul
Aug
Sep
Oct
Total
Forecast
4,000
4,800
5,600
7,200
6,400
5,000
33,000
Output
Regular
5000
5000
5000
5000
5000
5000
30000
Overtime
0
750
750
750
750
0
3000
Output - Forecast
1,000
950
150
-1,450
-650
0
Inventory
Beginning
0
1,000
1,950
2,100
650
0
Ending
1,000
1,950
2,100
650
0
0
Average
500
1475
2025
1375
325
0
Backlog
Costs:
Regular
$7
$35,000
$35,000
$35,000
$35,000
$35,000
$35,000
$210,000
Overtime
$18
$0
$13,500
$13,500
$13,500
$13,500
$0
$54,000
Hire/Lay off
$0
$0
$0
$0
$0
$0
$0
$0
Inventory
$1
$500
$1,475
$2,025
$1,375
$325
$0
$5,700
Back orders
$0
$0
$0
$0
$0
$0
$0
$0
Total
$35,500
$49,975
$50,525
$49,875
$48,825
$35,000
$269,700
Note: To avoid backlog in months of August, sep, oct. OT production is planned from June so has to produce excess inventory.
Total Cost = $269,700
Regular Prod. + OT
Period
May
Jun
Jul
Aug
Sep
Oct
Total
Forecast
4,000
4,800
5,600
7,200
6,400
5,000
33,000
Output
Regular
5000
5000
5000
5000
5000
5000
30000
Overtime
0
0
0
1600
1400
0
3000
Output - Forecast
1000
200
-600
-600
0
0
Inventory
Beginning
0
1000
1200
600
0
0
Ending
1000
1200
600
0
0
0
Average
500
1100
900
300
0
0
Backlog
Costs:
Regular
$7
$35,000
$35,000
$35,000
$35,000
$35,000
$35,000
$210,000
Overtime
$18
$0
$0
$0
$28,800
$25,200
$0
$54,000
Inventory
$1
$500
$1,100
$900
$300
$0
$0
$2,800
Back orders
Total
$35,500
$36,100
$35,900
$64,100
$60,200
$35,000
$266,800
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