Wormwood, Ltd., produces a variety of furniture products. The planning committee wants to prepare an aggregate plan for the next six months using the following information.Month1 2 3 4 5 6Demand 160 150 160 180 170 140CapacityRegular 150 150 150 150 160 160Overtime 10 10 0 10 10 10Cost Per UnitRegular time $50Overtime 75Subcontract 80Inventory holding, per month 4Subcontracting can handle a maximum of 10 units per month. Beginning inventory is zero.Develop a plan that minimizes total cost. No back orders are allowed. Regular capacity = Regularproduction.
Wormwood, Ltd., produces a variety of furniture products. The planning committee wants to prepare an aggregate plan for the next six months using the following information.Month1 2 3 4 5 6Demand 160 150 160 180 170 140CapacityRegular 150 150 150 150 160 160Overtime 10 10 0 10 10 10Cost Per UnitRegular time $50Overtime 75Subcontract 80Inventory holding, per month 4Subcontracting can handle a maximum of 10 units per month. Beginning inventory is zero.Develop a plan that minimizes total cost. No back orders are allowed. Regular capacity = Regularproduction.
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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Wormwood, Ltd., produces a variety of furniture products. The planning committee wants to prepare an aggregate plan for the next six months using the following information.
Month
1 2 3 4 5 6
Demand 160 150 160 180 170 140
Capacity
Regular 150 150 150 150 160 160
Overtime 10 10 0 10 10 10
Cost Per Unit
Regular time $50
Overtime 75
Subcontract 80
Inventory holding, per month 4
Subcontracting can handle a maximum of 10 units per month. Beginning inventory is zero.
Develop a plan that minimizes total cost. No back orders are allowed. Regular capacity = Regular
production.
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