Salses period

Mar. Apr. May

Demand 800 1000 750

Capacity 700 700 700

Overtime 50 50 50
Sub-contracting 150 150 150
Beginning Inventory 100

Costs per unit

Regular Time $40 per unit

Over time $50 per unit
Sub contract $70 per unit
Carrying cost $2 per unit per month
 period 1 period 2 period 3
Beginning 0 2 4
REGULAR 40 42 44
PERIOD 1 OVERTIME 50 52 54
SUB CONTRACT 70 72 74
REGULAR 10000 40 42
PERIOD 2 OVERTIME 10000 50 52
SUB CONTRACT 10000 70 72
REGULAR 10000 10000 40
PERIOD 3 OVERTIME 10000 10000 50
SUB CONTRACT 10000 10000 70

period 1 period 2 period 3 Capacity

Beginning 0 0 0 0 100 17045000
REGULAR 0 97.1729053 452.8270957 550 700
PERIOD 1 OVERTIME 0 2.441406E-05 49.99997559 50 50
SUB CONTRACT 0 1.21986277 148.7801372 150 150
REGULAR 700 0 0 700 700
PERIOD 2 OVERTIME 50 0 0 50 50
SUB CONTRACT 50 1.607208514 98.39279149 150 150
REGULAR 0 700 0 700 700
PERIOD 3 OVERTIME 0 50 0 50 50
SUB CONTRACT 0 150 0 150 150
800 1000.000001 750

Mar. Apr. May

Demand 800 1000 750
PRODUCTION PLAN 1: EXACT PRODUCTION; VARY INVENTORY AND STOCKOUT
JANUARY FEBRUARY MARCH APRIL

Production Requirement 1850 1425 1000 850

Production hours required 9250 7125 5000 4250

(Production requirement * 5hr./unit)
Working days per month 22 19 21 21
Hours per month per worker 176 152 168 168
(working days * 8 hr./day)
Workers required 52.56 46.88 29.76 25.30
(Production hours required / Hours per
month per worker) 53 47 30 26
New workers hired 0 0 0 0
(assuming open workforce equal to first
months requirement of 53 workers)
Hiring cost Rs. 0.00 Rs. 0.00 Rs. 0.00 Rs. 0.00
(New workers hired * 200 Rs)
Workers laid of 0 6 17 4
Layof cost Rs. 0.00 Rs. 1,500.00 Rs. 4,250.00 Rs. 1,000.00
(Worker laid of * 250 Rs)
Straight-time cost Rs. 37,000.00 Rs. 28,500.00 Rs. 20,000.00 Rs. 17,000.00
(Production hours required * 4 Rs)

Total Cost
ND STOCKOUT
MAY JUNE TOTALS

1150 1725 8000

5750 8625 40000

22 20 125
176 160 1000

32.67 53.91 241.07

33 54
8 21 29

Rs. 1,600.00 Rs. 4,200.00 Rs. 5,800.00

0 0 27
Rs. 0.00 Rs. 0.00 Rs. 6,750.00

Rs. 23,000.00 Rs. 34,500.00 Rs. 160,000.00

Rs. 172,550.00
PRODUCTION PLAN 2: CONSTANT WORKFORCE; VARY INVENTORY AND STO
JANUARY FEBRUARY MARCH APRIL

Beginning Inventory 400 8 -276 -32

Working days per month 22 19 21 21
Production hours available 7040 6080 6720 6720
(Working days per month *8 hr./day *
40 workers)
Actual Production 1408 1216 1344 1344
(Production hours available / 5
hr./unit)
Demand forecast 1800 1500 1100 900
Ending Inventory 8 -276 -32 412
(Beginning Inventory + Actual
Production - Demand forecast)
Shortage cost Rs. 0.00 Rs. 1,380.00 Rs. 160.00 Rs. 0.00
(Units short * 5 Rs)
Permitted Safety stock 450 375 275 225
Unit excess 0 0 0 187
(Ending inventory - safety stock)
Inventory cost Rs. 0.00 Rs. 0.00 Rs. 0.00 Rs. 280.50
(Units excess * 1.5 Rs)
Straight-line cost Rs. 28,160.00 Rs. 24,320.00 Rs. 26,880.00 Rs. 26,880.00

(Production hours available * 4 Rs)

Total Cost
Y INVENTORY AND STOCKOUT
MAY JUNE TOTALS

412 720 1232

22 20 125
7040 6400 40000

1408 1280 8000

1100 1600 8000

720 400 1232

Rs. 0.00 Rs. 0.00 Rs. 1,540.00

275 400 2000

445 0 632

Rs. 667.50 Rs. 0.00 Rs. 948.00

Rs. 28,160.00 Rs. 25,600.00 Rs. 160,000.00

162488
PRODUCTION PLAN 3: CONSTANT LOW WORKFORCE; SUBCONTRACT
JANUARY FEBRUARY MARCH APRIL

Production requirement 1850 1425 1000 850

Working days per month 22 19 21 21
Production hours available 4400 3800 4200 4200
(Working days per month *8 hr./day *
25 workers)
Actual Production 880 760 840 840
(Production hours available / 5
hr./unit)
Units Subcontracted 970 665 160 10
(Production requiremnt - Actual
Production)
Subcontracting cost Rs. 19,400.00 Rs. 13,300.00 Rs. 3,200.00 Rs. 200.00
(Units subcontracted * 20 Rs)
Straight-line cost Rs. 17,600.00 Rs. 15,200.00 Rs. 16,800.00 Rs. 16,800.00
(Production hours available * 4 Rs)

Total Cost
ONTRACT
MAY JUNE TOTALS

1150 1725 8000

22 20 125
4400 4000 25000

880 800 5000

270 925 3000

Rs. 5,400.00 Rs. 18,500.00 Rs. 60,000.00

Rs. 17,600.00 Rs. 16,000.00 Rs. 100,000.00

160000
PRODUCTION PLAN 2: CONSTANT WORKFORCE; OVERTIME
JANUARY FEBRUARY MARCH APRIL

Beginning Inventory 400 -62.4 -407.2 -230.4

Working days per month 22 19 21 21
Production hours available 6688 5776 6384 6384
(Working days per month *8 hr./day *
38 workers)
Regular Shift Production 1337.6 1155.2 1276.8 1276.8
(Production hours available / 5
hr./unit)
Demand forecast 1800 1500 1100 900
Units available before overtime -62.4 -407.2 -230.4 146.4
(Beginning Inventory + Regular
Production - Demand forecast)
Shortage cost Rs. 312.00 Rs. 2,036.00 Rs. 1,152.00 Rs. 0.00
(Units short * 5 Rs)
Permitted Safety stock 450 375 275 225
Unit excess 0 0 0 0
(Ending inventory - safety stock)
Inventory cost Rs. 0.00 Rs. 0.00 Rs. 0.00 Rs. 0.00
(Units excess * 1.5 Rs)
Straight-line cost Rs. 26,752.00 Rs. 23,104.00 Rs. 25,536.00 Rs. 25,536.00

(Production hours available * 4 Rs)

Total Cost
MAY JUNE TOTALS

146.4 384 230.4

22 20 125
6688 6080 38000

1337.6 1216 7600

1100 1600 8000

384 0 -169.6

Rs. 0.00 Rs. 0.00 Rs. 3,500.00

275 400 2000

109 0 109

Rs. 163.50 Rs. 0.00 Rs. 163.50

Rs. 26,752.00 Rs. 24,320.00 Rs. 152,000.00

155663.5
 PLAN1 PLAN 2 PLAN3 PLAN4

Hiring
Layof
Excess
Storage
Subcontracting
Overtime

Total