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:

Year

Forecasts demand 1 300000 2 120000 3 200000 4 110000 5 135000

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

a.

Assuming shortage are not allowed, determine the minimum constant workforce that he will need over the next five years.

Answer:
Year 1 2 3 4 5 Forecasts demand Net Cumulative demand Cum. # of unit produced per worker Ratio C/D 300000 300000 30000 120000 420000 60000 200000 620000 90000 110000 730000 120000 135000 865000 150000 Rounding 10 7 6,888888889 6,083333333 5,766666667 10 7 7 7 7

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:
Year 1 2 3 4 5 # of unit produced per Worker Yearly Production 30000 30000 30000 30000 30000 210000 210000 210000 210000 210000 Cumulative Production Cumulative Net Demand Ending Inventory 210000 300000 -90000 420000 400000 20000 630000 600000 30000 840000 710000 130000 1050000 845000 205000 295000

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 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

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

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
Year # of unit produced per Worker Yearly Production 1 30000 2 30000 3 30000 4 30000 5 30000 Cumulative Production Cumulative Net Demand Ending Inventory 210000 210000 300000 -90000 210000 420000 400000 20000 210000 630000 600000 30000 210000 840000 710000 130000 210000 1050000 845000 205000 295000

Total cost is becoming 13.800 + 77.000 = $ 90.800

Problem 3.14 Table of demand forecasting for a semiconductor company

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
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

Month # of dollars per worker Monthly Production January 5280 February 3840 March 5040 April 4560 May 5520 June 4800 July 5760 August 2880 September 4560 October 5280 November 4800 December 3840 3553440 2584320 3391920 3068880 3714960 3230400 3876480 1938240 3068880 3553440 3230400 2584320 Cum. Production Cum. Net Demand Ending Inventory 3553440 3280000 273440 6137760 7080000 -942240 9529680 9280000 249680 12598560 10280000 2318560 16313520 15180000 1133520 19543920 21430000 -1886080 23420400 25180000 -1759600 25358640 28280000 -2921360 28427520 30030000 -1602480 31980960 31480000 500960 35211360 32680000 2531360 37795680 35330000 2465680 361440

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

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:

Cum. Net Demand

Cumulative number of unit (dollars) 40000000 35000000 30000000 25000000 20000000 15000000 10000000 5000000 0