Solve the problem using both chase demand and level production and determine which gives a better return. 14-1. Bioway, Inc., a manufacturer of medical supplies, uses ag-gregate planning to set labor and inventory levels for theyear. While a variety of items are produced, a standard kitcomposed of basic supplies is used for planning purposes.Demand varies with seasonal illnesses and the quarterly or-dering policies of hospitals. The average worker at Biowaycan produce 1000 kits a month at a cost of $9 per kit dur-ing regular production hours and $10 a kit during overtimeproduction. Completed kits can also be purchased fromoutside suppliers at $12 each. Inventory carrying costs are$2 per kit per month. Overtime is limited to regular pro-duction, but subcontracting is unlimited. Due to high qualitystandards and extensive training, hiring and firing costs are$1500 per worker. Bioway currently employs 25 workers.Given the demand forecast below, develop a six-month ag-gregate production plan for Bioway using (a) chase demandand (b) a mixed strategy where the current workforce iskept for April through August, and supplemented withovertime and subcontracting as needed.MonthDemand60,000AprilMay22,000June15,000July46,00080,000AugustSeptember15,000

gregate production plan for Bioway using (a) chase demand and (b) a mixed strategy where the current workforce is kept for April through August, and supplemented with overtime and subcontracting as needed.

gregate production plan for Bioway using (a) chase demand and (b) a mixed strategy where the current workforce is kept for April through August, and supplemented with overtime and subcontracting as needed.

Contemporary Marketing

18th Edition

ISBN:9780357033777

Author:Louis E. Boone, David L. Kurtz

Publisher:Louis E. Boone, David L. Kurtz

Chapter15: Distribution Channels And Supply Chain Management

Section15.4: Components Of The Supply Chain

Problem 1LO

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