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A juarez, Mexico, manufacturer of roofing supplies has developed monthly forecasts for a family of products. Data for the 6-month period January to June are presented in the table below. There are 8 hours of production per day.

Table 1

Month Production Days Demand Forecast

January 22 900

February 18 700

March 21 800

April 21 1200

May 22 1500

June 20 1100

Other Data

Inventory Carrying Cost $8 per unit per month

Subcontracting cost per unit $12 per unit

Average pay rate $5 per hour ($40 per day)

Overtime pay Rate $7 per hours (above 8 hours per day)

Labor hours per unit 1.6 hrs per unit

Cost of increasing daily production rate (hiring and training) $300 per unit

Cost of decreasing daily production rate (layoffs) 6$600 per unit

b) Juarex has yet a sixth plan. A constant workforce of 7 is selected, with the remainder of demand filled by subcontracting. Evaluate this plan.

The production rate per day= ____ units (whole number)

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M91350976

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