Because of its labor contract a company must hire enough lab

Because of its labor contract a company must hire enough labor for 100units of production per weck on one shift or 200 units per week on two shifts. They cannot hire layoff or work over time. During the fourth week workers will be available from another department to work part or all of an extra shift (up to 100 units). There is a planned shut down for maintenance in second week which will cut to half. Develop a production plan the open inventory is 200 units and desired ending inventory is 300 units. 2.13 Total production 300 +1080-200-1180 units Number of weeks available for production 5.5 (because week 2 is half week) Average weekly level production 1180/55-214.5 units week The nearest quantity that can be produced is 200 units on two shifts. In the second week there is a shutdown so production in that week will be only 100 units Total production so far 5 x 200+100 1100 units The balance of 80 units can be made in week four when extra helpis available. But when you make you have to make at least 100, so that week four\'s production will be 300. Therefore total production is Please filling in the table below) Week Forecast demand Planned Production Planned inventory 200 1 2345 6 Total 120 160 240 240 160 1080 Finally, the ending inventory will not be 300 units,why!

Solution

Total production required = Ending inventory + sum of forecast demand – Opening inventory = 300 + 1080 – 200 = 1180

Since week 2 is cut to half, total number of weeks available for production = 5.5 weeks

It is however mentioned that maximum available normal monthly production = 200

Thus, total normal production in 5.5 weeks = 200 x 5.5 = 1100 units

Thus , shortfall which needs to be catered from extra production during week 4 = 1180 – 1100 = 80 units

It is to be note that maximum “upto 100 units” can be produced in week 4 .

Since production requirement of 80 < Maximum additional production available of 100 units, it is a feasible plan

Thus Production plan would be as per following:

Week 1 = 200 units

Week 2 = 100 units

Week 3 = 200 Units

Week 4 = 200 + 80 = 280units

Week 5 = 200 units

Week 6 = 200 units

Week

1

2

3

4

5

6

Total

Forecast demand

120

160

240

240

160

160

1080

Planned production

200

100

200

280

200

200

1180

Planned inventory :200

280

220

180

220

260

300

Week	1	2	3	4	5	6	Total
Forecast demand	120	160	240	240	160	160	1080
Planned production	200	100	200	280	200	200	1180
Planned inventory :200	280	220	180	220	260	300