Developing an Aggregate Plan – Bradford Manufacturing.docx

Aggregate Plan – Bradford Manufacturing ReportThe goal of this report is to prepare an aggregate plan for Bradford manufacturing to meet the demand forecast for the coming year (Q1 - Q4) with possible lowest total cost. Three strategy: chase strategy (exact production), constant workforce-overtime and level strategy (vary inventory) are analyzed in this report to addition, each quarter budget and the total cost is calculated to compare in different strategy analysis.The forecast demand by quarter (1.000 case unites) for the next year in Branford Manufacturing, Q1—2,000; Q2—2,200; Q3—2,500; Q4—2,650; and Q1 (next year)—2,200. These numbers are in 1,000-case units. Each number represents a 13-week forecast, and the ending inventory target levels for each quarter are: Q1—338; Q2—385; Q3—408; Q4—338, the working days per quarter is Q1—63; Q2—62; Q3—64; Q4—60. The planning data are :Initial number of employees: 60employeesEmployees per line: 6Standard production rate (each line): 450Cases per hourEmployee pay rate:$20.00per hourOvertime pay rate: $30.00per hourStandard hours per shift: 7.5hoursMaximum overtime per day: 2hoursInventory carry cost: $1.00per case per year 0.25Backorder cost: $2.40Employee hiring and training cost:$5,000.00per employeeEmployee layoff cost: $3,000.00per employeeAlso In this production planning, we make the following assumptions:Assume that the total demand must be satisfied (i.e., there is no backorder) at the end of the coming year. Assume also that the ending inventory target level each quarter must be satisfied even having backorders. Chase strategyChase strategy is a way to match the production rate to the order rate by hiring and laying off employees as the order rate varies. The success of this strategy depends on having a pool of easily trained applicants to draw on as order volumes increase. Table 1 shows the process and data to analyze the production planning, including production requirement(demand forecast + ending inven