January February March April May June

Demand forecast 1800 1500 1100 900 1100 1600

Number of working days 22 19 21 21 22 20

Materials 100
Inventory hoding cost 1.5
Marginal cost of stockout 5
Marginal cost of subcontracting 20
Hiring and training 200
Layof 250
Labor hours required 5
straight-time cost 4
overtime cost 6
beginning inventory 400
safety stock 25%

Aggregate Production Planning Requirements

Jan Feb Mar Apr May Jun

Beginning inventory 400 450 375 275 225 275
Demand forecast 1800 1500 1100 900 1100 1600

safety stock(.25 x demand forecast 450 375 275 225 275 400
Production requirement (demand
forecast+safety stock-beginning
inventory) 1850 1425 1000 850 1150 1725

Ending inventory (beginning inventory

+production requirement-demand
forecast) 450 375 275 225 275 400

PLAN 1 chase strategy - exact production, vary workforce

Jan Feb Mar Apr May Jun
Production requirement 1850 1425 1000 850 1150 1725
Production hours required (production
requirement x 5hr/unit) 9250 7125 5000 4250 5750 8625
Working days per month 22 19 21 21 22 20

Hours per month per worker (working

days x 8hr/day) 176 152 168 168 176 160

Worker required (production hours

required/hours per month per worker) 53 47 30 26 33 54
New workers hired 0 0 0 0 7 21
Hiring cost (new worker hired*200) 0 0 0 0 1400 4200
Worker laidof 0 6 17 4 0 0
Layof cost(worker laid of* 250) 0 1500 4250 1000 0 0

Straight time cost (production hours

required *4) 37000 28500 20000 17000 23000 34500
total cost

PLAN 2 stable workforce - vary inventory, vary stockout Number of workers 40

Jan Feb Mar Apr May Jun
Beginning inventory 400 8 -276 -32 412 720
Working days per month 22 19 21 21 22 20
Production hours available (working days
per month *8hr/day*40 workers) 7040 6080 6720 6720 7040 6400

Actual production(production hours

available/ 5hr per unit) 1408 1216 1344 1344 1408 1280
Demand forecast 1800 1500 1100 900 1100 1600
Ending Inventory(beginning
inventory+actual production- demand
forecat) 8 -276 -32 412 720 400
Shortage cost (unit shorts*5) 0 1380 160 0 0 0
Safety stock 450 375 275 225 275 400
Unit excess(ending inventory- safety
stock)only if poositive 0 0 0 187 445 0

Inventory cost( unit excess*1.5) 0 0 0 280.5 667.5 0

Straight-time cost(prod hours
available*4) 28160 24320 26880 26880 28160 25600
total cost

PLAN 3 stable wokforce - constant low workforce, subcontract Number of workers 25

Jan Feb Mar Apr May Jun
Production requirement 1850 1425 1000 850 1150 1725
Working days per month 22 19 21 21 22 20
Prod hours available(working days *8hr
per day*25 workers) 4400 3800 4200 4200 4400 4000
Actual production(production hours
available/ 5hr per unit) 880 760 840 840 880 800
Unit subcontracted(prod requirement-
actual production) 970 665 160 10 270 925
Subcontracting cost(unit
subcontracted*20) 19400 13300 3200 200 5400 18500
Straight time cost (production hours
required *4) 17600 15200 16800 16800 17600 16000
total cost

PLAN 4 constant workforce, overtime Number of workers 38

 Jan Feb Mar Apr May Jun
Beginning inventory 400 0 0 177 554 792
Working days per month 22 19 21 21 22 20

Production hours available (working days

per month *8hr/day*38 workers) 6688 5776 6384 6384 6688 6080
Regular shift Production(production
hours available/ 5hr per unit) 1337.6 1155.2 1276.8 1276.8 1337.6 1216
Demand forecast 1800 1500 1100 900 1100 1600

Units available before overtimebeginning

inventory+regular shift prod- demand
forecat) -62 -345 177 554 792 408
Units overtime 62 345 0 0 0 0
Overtime cost 1860 10350 0 0 0 0
Safety stock 450 375 275 225 275 400
Unit excess(ending inventory- safety
stock)only if poositive 0 0 0 329 517 8
Inventory cost( unit excess*1.5) 0 0 0 493.5 775.5 12
Straight-time cost(prod hours
available*4) 26752 23104 25536 25536 26752 24320
total cost
Totals
8000
125

sum

5600
 6750

160000
172350

sum

1540

948

160000
162488

sum

60000

100000
160000
sum

12210

1281

152000
165491
Danny Pangesti Utomo (29118528)

Aggregate plan for Michael Carigg inc. using Level stategy to fulfil the unmet in the next period
Months July August Sept October November
Beginning Inventory 150 0 0 0 0
Demand 400 500 550 700 800
Production Requirement 250 500 550 700 800
Ending Inventory 0 0 0 0 0

with constant production, vary workforce

Months July August Sept October November
Production requirement 250 500 550 700 800
Production hours required 1000 2000 2200 2800 3200
Working days per month 20 20 20 20 20
Hours per month per worker 160 160 160 160 160
Worker required(roundup) 8 7 13 14 18 20
New workers hired 0 6 1 4 2
Hiring Cost $ - $ 240.00 $ 40.00 $ 160.00 $ 80.00
Workers laid of 1 0 0 0 0
Layof cost $ 80.00 $ - $ - $ - $ -
Labor cost $ 12,000.00 $ 24,000.00 $ 26,400.00 $ 33,600.00 $ 38,400.00

We get te total cost of $ 168,760

 December
0
700
700
0

December Total
700
2800
20
160
18
0
$ - $ 520.00
2
$ 160.00 $ 240.00
$ 33,600.00 $ 168,000.00
$ 168,760.00
 Aggregate plan by varying subcontract for fulfilling unmet demand
Months July August Sept October
Beginning Inventory 150 0 0 0
Demand 400 500 550 700
Production Requirement 250 500 550 700
Ending Inventory 0 0 0 0

Months July August Sept October

Production requirement 250 500 550 700
Working day per month 20 20 20 20
Production hours available 1280 1280 1280 1280
Actual Production 320 320 320 320
Units subcontracted -70 180 230 380
Subcontracting cost $ - $ 14,400.00 $ 18,400.00 $ 30,400.00
Labor cost $ 15,360.00 $ 15,360.00 $ 15,360.00 $ 15,360.00

We get te total cost of $ 224,160

November December
0 0
800 700
800 700
0 0

November December Total

800 700
20 20
1280 1280
320 320
480 380
$ 38,400.00 $ 30,400.00 $ 132,000.00
$ 15,360.00 $ 15,360.00 $ 92,160.00
$ 224,160.00
 Aggregate plan by Varying overtime for fulfilling unmet demand

Months July August Sept October

Beginning Inventory 150 0 0 0
Demand 400 500 550 700
Production Requirement 250 500 550 700
Ending Inventory 0 0 0 0

After iteration of trial and error, the optimum workers is 14 that produce minimum cost of $182,000
Months July August Sept October
Beginning Inventory 150 310 370 380
Working days per month 20 20 20 20
Working hours/day 8 8 8 8
Workers 8 14 14 14 14
Worker Hired 6 0 0 0
Production hours available 2240 2240 2240 2240
Regular shift production 560 560 560 560
Demand 400 500 550 700
Units Available before overtime 310 370 380 240
Unit Overtime 0 0 0 0
Hiring Cost $ 240.00 $ - $ - $ -
Overtime Cost $ - $ - $ - $ -
Labor Cost $ 26,880.00 $ 26,880.00 $ 26,880.00 $ 26,880.00
Holding Cost $ 2,480.00 $ 2,960.00 $ 3,040.00 $ 1,920.00

Iteration for 15 workers

Months July August Sept October
Beginning Inventory 150 350 450 500
Working days per month 20 20 20 20
Working hours/day 8 8 8 8
Workers 8 15 15 15 15
Worker Hired 7 0 0 0
Production hours available 2400 2400 2400 2400
Regular shift production 600 600 600 600
Demand 400 500 550 700
Units Available before overtime 350 450 500 400
Unit Overtime 0 0 0 0
Hiring Cost $ 280.00 $ - $ - $ -
Overtime Cost $ - $ - $ - $ -
Labor Cost $ 28,800.00 $ 28,800.00 $ 28,800.00 $ 28,800.00
 Holding Cost $ 2,800.00 $ 3,600.00 $ 4,000.00 $ 3,200.00

Iteration for 13 workers

Months July August Sept October
Beginning Inventory 150 270 290 260
Working days per month 20 20 20 20
Working hours/day 8 8 8 8
Workers 8 13 13 13 13
Worker Hired 5 0 0 0
Production hours available 2080 2080 2080 2080
Regular shift production 520 520 520 520
Demand 400 500 550 700
Units Available before overtime 270 290 260 80
Unit Overtime 0 0 0 0
Hiring Cost $ 200.00 $ - $ - $ -
Overtime Cost $ - $ - $ - $ -
Labor Cost $ 24,960.00 $ 24,960.00 $ 24,960.00 $ 24,960.00
Holding Cost $ 2,160.00 $ 2,320.00 $ 2,080.00 $ 640.00
 November December
0 0
800 700
800 700
0 0

cost of $182,000
November December Total
240 0
20 20
8 8
14 14
0 0
2240 2240
560 560
800 700
0 -140
0 140
$ - $ - $ 240.00
$ - $ 10,080.00 $ 10,080.00
$ 26,880.00 $ 26,880.00 $ 161,280.00
$ - $ - $ 10,400.00
$ 182,000.00

November December Total

400 200
20 20
8 8
15 15
0 0
2400 2400
600 600
800 700
200 100
0 0
$ - $ - $ 280.00
$ - $ - $ -
$ 28,800.00 $ 28,800.00 $ 172,800.00
$ 1,600.00 $ 800.00 $ 16,000.00
$ 189,080.00

November December Total

80 0
20 20
8 8
13 13
0 0
2080 2080
520 520
800 700
-200 -180
200 180
$ - $ - $ 200.00
$ 14,400.00 $ 12,960.00 $ 27,360.00
$ 24,960.00 $ 24,960.00 $ 149,760.00
$ - $ - $ 7,200.00
$ 184,520.00