Nama : I Made wiratha Nungrat

NIM : 13209057

Homework 3

Problem 3.5 A Large manufacturer of household consumer goods is considering integrating an

aggregate planning model into its manufacturing strategy. Two of the company vice presidents

disagree strongly as to the value of the approach. What arguments might each of the vice presidents

use to support his or her point of view?

Answer:

- First possible argument is Aggregate planning always assumed that forecast demand in the

future is perfect. This mean that it depends strongly on availability of forecast demand

which is has possibility of error of sometime in the future. Forecast demand itself actually

wrong because demand in the future is impossible to measure exactly, which is turns out to

be some margin of error.

- Second possible argument is implementation of aggregate planning need extra careful

calculation otherwise the firm can lose a lot of money and has several problem which are

could bring some devastating effect to the firm or company such as Smoothing cost: The

cost of changing production and workforce. Changing the workforce mean that the firm

needs to fire or hire labor frequently to meet the demand and production plan. Firing and

hiring labor is not easy that it look because it need extra cost for interviewing and train new

labor and cost for laid off labor.

Problem 3.9 Small farm in the Salinas Valley grows apricots. The manager estimates that sales over

the next five years will be as follows:

Figure 1. Table of forecasts

Given :

- Current workers = 3

- Current Inventory (end of December) = 20.000 packages

- Each worker is paid $ 25.000/30.000 package/year

- Inventory Cost = 4 cent/package/year

- Cost of Hiring = $ 500

- Cost of Firing = $ 1.000

Year Forecasts demand

1 300000

2 120000

3 200000

4 110000

5 135000

a. Assuming shortage are not allowed, determine the minimum constant workforce that he will

need over the next five years.

Answer:

Note :

Year 1 demand forecast is 300.000, but the end of current year inventory is 20.000 packages.

The minimum constant workforce that he needed for next five years is 7 workers.

b. Evaluate The cost of plan found in part a

Answer:

Because the worker at the end of current year is 3, he needed only 4 more workers.

Total cost:

- Cost of Hiring = 4 x 500

= $ 2.000

-

= $ 11.800

- Total Cost = 11.800 + 2.000

= $ 13.800

If we use Zero Inventory Method,

Year Forecasts demand Net Cumulative demand Cum. # of unit produced per workerRatio C/D Rounding

1 300000 300000 30000 10 10

2 120000 420000 60000 7 7

3 200000 620000 90000 6,888888889 7

4 110000 730000 120000 6,083333333 7

5 135000 865000 150000 5,766666667 7

Year # of unit produced per WorkerYearly Production Cumulative Production Cumulative Net Demand Ending Inventory

1 30000 210000 210000 300000 -90000

2 30000 210000 420000 400000 20000

3 30000 210000 630000 600000 30000

4 30000 210000 840000 710000 130000

5 30000 210000 1050000 845000 205000

295000

Year Forecasts demand Cumulative Net Dmand # of workers required Rounding

1 280000 280000 9,333333333 10

2 120000 400000 4 4

3 200000 600000 6,666666667 7

4 110000 710000 3,666666667 4

5 135000 845000 4,5 5

Total cost:

- Cost of Hiring = 11 x $ 500

= $ 5.500

- Cost of Firing = 9 x $ 1.000

= $ 9.000

- Cost of Inventory = 165.000 x $ 0,04

= $ 6.600

Total = 5.500 + 9.000 + 6.600 = $ 21.100

For this problem, Constant workforce plan give us a better solution.

Problem 3.11 An Implicit assumption made in Problem 9 was that dried apricots unsold at the end

of a year could be sold in subsequent years. Suppose that apricots unsold at the end of any year

must be discarded. Assume that a disposal cost of $ 0,20 per package.

Answer:

If we still using Constant Workforce Plan, the result is still same and fails to predict the cost

a. Minimum constant workforce

Answer :

We still need 7 Workers

b. Total Cost

Total cost is becoming 13.800 + 77.000 = $ 90.800

Year # Workers # Hired # Fired # of units per worker #unit produced Cum. production Cum. demand Ending Inventory

1 10 7 30000 300000 300000 280000 20000

2 4 6 30000 120000 420000 400000 20000

3 7 3 30000 210000 630000 600000 30000

4 4 3 30000 120000 750000 710000 40000

5 5 1 30000 150000 900000 845000 55000

11 9 165000

Year # of unit produced per WorkerYearly Production Cumulative Production Cumulative Net Demand Ending Inventory

1 30000 210000 210000 300000 -90000

2 30000 210000 420000 400000 20000

3 30000 210000 630000 600000 30000

4 30000 210000 840000 710000 130000

5 30000 210000 1050000 845000 205000

295000

Problem 3.14 Table of demand forecasting for a semiconductor company

Answer :

- Current workers = 675

- Current Inventory (end of December) = $ 120.000

- Nexxt Inventory = $ 100.000

- K = $ 60.000/year = $ 240 day/worker

- Inventory Cost = 25% annual interest rate charge

- Cost of Hiring = $ 200

- Cost of Firing = $ 400

a. Minimum constant workforce is 673 workers

This is the cheapest scenario for next year production portofolio which is need 673

workers

b. Total cost of plan

- Cost of firing = 675-673 = 2 workers

= 2 x 400 = $ 800

Month Production Days Predicted Demand($ 10.000)

January 22 340

February 16 380

March 21 220

April 19 100

May 23 490

June 20 625

July 24 375

August 12 310

September 19 175

October 22 145

November 20 120

December 16 165

Month # of dollars per workerMonthly Production Cum. Production Cum. Net Demand Ending Inventory

January 5280 3553440 3553440 3280000 273440

February 3840 2584320 6137760 7080000 -942240

March 5040 3391920 9529680 9280000 249680

April 4560 3068880 12598560 10280000 2318560

May 5520 3714960 16313520 15180000 1133520

June 4800 3230400 19543920 21430000 -1886080

July 5760 3876480 23420400 25180000 -1759600

August 2880 1938240 25358640 28280000 -2921360

September 4560 3068880 28427520 30030000 -1602480

October 5280 3553440 31980960 31480000 500960

November 4800 3230400 35211360 32680000 2531360

December 3840 2584320 37795680 35330000 2465680

361440

- Cost of Inventory = 361.440 + 100.000

= 461.440 X 25% (annual interest charge) = 115.360

Total Cost = 115.360 + 800 = $ 116.160

Problem 3.16 Graph the cumulative net demand

Answer:

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10000000

15000000

20000000

25000000

30000000

35000000

40000000

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Cum. Net Demand