# Graphical Method of Aggregate Planning

Anonymous
timer Asked: Feb 19th, 2019
account_balance_wallet \$25

### Question Description

we stated that an "aggregate plan will include the quantity and timing of production for the intermediate future (typically 3-18 months ahead).” Some factors such as demand, pay rate, and the ability to use overtime or subcontract some of the production must be taken into consideration to keep the total cost of production as low as possible.

You have been asked to build the aggregate planning schedule for your factory for the next six months and to determine the best option.

This chart provides the variables and cost for each variable.

VariablesCost
Inventory carrying cost\$6 per unit per month
Subcontracting cost\$25 per unit
Average pay rate\$12.50 per hour (8 hours per day)
Overtime pay rate\$18 per hour (above 8 hours per day)
Labor-hours needed to produce one unit1.5 hours per unit
Units per day produced10
Beginning inventory0
Planned ending inventory0
Lost sales per unit\$100

This chart provides the demand for the product and the number of production days per month.

MonthsDemandProduction Days
January120022
February80018
March60021
April150021
May140022
June13002

Complete the steps in each section and then submit your assignment for grading. Submit one spreadsheet containing a tab for each step.

### Step 1: Prepare Your Aggregate Plan

Use the Excel OM Aggregate Planning spreadsheet and the data to prepare your aggregate plan. Produce a graph of your plan. The intent is to use a level strategy (or level scheduling) with no overtime, no safety stock, and no subcontractors.

### Step 2: Update Your Aggregate Plan Using Overtime

In the plan produced in Step 1, the production rate did not meet the total demand. If you were able to use overtime to meet the shortfall, what would your aggregate plan look like?

Use the Excel OM Aggregate Planning spreadsheet and the data to prepare an updated aggregate plan.

### tep 3: Update Your Aggregate Plan Using Outsourcing

Instead of paying overtime, you might be able to outsource the shortfall in production. Use the Excel OM Aggregate Planning spreadsheet and the data to prepare an updated aggregate plan using outsources instead of paying overtime.

### Step 4: Summarize and Submit

On a fourth tab of the spreadsheet, summarize your cost and determine which of the three options produces the lowest overall cost.

Submit one spreadsheet containing a tab for each step. Save your assignment using a naming convention that includes your first and last name and the activity number (or description). Do not add punctuation or special characters.

peachblack
School: UT Austin

Please find attached. Le me know if you need edits.

Months

January

Working days per month
Demand Forecast (units)
Safety stock
Production Requirement
Output

22
1200
0
1200
220

Regular Production
Overtime Production

0

subcontracted Production

0

output forecast
Inventory

0
0
0
980

Beginning
Ending
Average

Backlog

Regular time =848* \$12.50 =10,600
Inventory carryng cost=
Backorders= 5740*100

\$10,600
0
574,000
584,600

February

March

18

Ap...

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Review

Anonymous
Tutor went the extra mile to help me with this essay. Citations were a bit shaky but I appreciated how well he handled APA styles and how ok he was to change them even though I didnt specify. Got a B+ which is believable and acceptable.

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