Supply Chain Mgmnt - "Planning" Question using Excel

timer Asked: Nov 17th, 2016

Question description

This problem is divided into multiple questions, as I have detailed in the attached excel file.

In addition to answering the questions, I'm asking that you also provide the steps taken in answering each section. I do want to learn this so I know for the soon to be taken final.

Basically, this is the problem question:


Please create the following Excel solution and answer in text boxes inside Excel. 

Jordan Enterprises is the largest maker and distributor of smartphones in the world, and is planning its production for next year. Jordan's monthly demand forecasts are shown in the following table:


Jordan's production is hand-assembly, which is labor intensive, and represents the largest limiting factor in its production capacity. Component costs for each smartphone are $20 per unit. The facility works 8 hours per day, 20 days per month. Each worker can assemble a smartphone in 12 minutes, on average, and are paid $25 per hour, with the usual time-and-a-half pay for overtime work. Jordan currently employs 1,500 production workers.

Jordan's inventory holding costs are $5 per smartphone per month, and is starting off with an inventory of 50,000 smartphones, which is what the ending inventory must be as well. Overtime cannot exceed 20 hours per month per employee, and there is a policy that there can be no layoffs of employees.


1.  What is the optimum production schedule, if we assume that there can be no hires, no backlogs, and no subcontracting? What is the cost of this schedule?

2.  Does it help with the schedule in question 1 above if we increase the overtime limit to 35 hours per employee per month?

3.  Reconsider #s 1 and 2 assuming that Jordan starts with only 1350 employees. What about 1200 employees? Does the addition of more overtime become important if we decreases the workforce?

4.  Reconsider #1 assuming a "level" approach to scheduling production. In this approach, the quantity produced must not exceed the average demand by more than 50,000 units. What is the cost of this approach compared to the "chase" approach used in #1? Does overtime become important here?

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