Indian

Microwaves
:Aggregate Planning
By-
Ashutosh Kumar Jha(91011)
Deepinder Singh(91016)
Divanshu Kapoor(91017)
Harsh Agrawal(91022)
Nishant Singh(91039)
Sweta Agarwal(91059)
 Case of Aggregate Planning
• Data is given for “Indian Microwaves” annual
production forecasts.
• Aggregate planning & costing to be done
• Four production plans are made & least costly
one is chosen
 Four production plans
• Production Plan 1: Exact Production; Vary
Workforce
• Production Plan 2: Constant Workforce; Vary
Inventory and Stockout
• Production Plan 3: Constant Low Workforce;
Subcontract
• Production Plan 4: Constant Workforce;
Overtime
 Given Data
Jan Feb Mar April June
Beginning Inventory 500 450 375 275 225
Demand Forecast 10000 10000 10000 10000 10000
Number of Working Days by
20 20 20 20 20
Month

July Aug Sept Oct Nov Dec

275
11000 13000 18000 25000 30000 10000
20 20 20 20 20 20
 Given Data

Costs
Materials 5,000.00 Rs per unit
Inventory holding cost 40.00 Rs per unit per m
Marginal cost of stockout 2,000.00 Rs per unit per m
Marginal cost of subcontracting 5,750.00 Rs per unit
Hiring and training cost 3,000.00 Rs per worker
Layoff cost 5,000.00 Rs per worker
Labor hours required per unit 20.00 Hrs per unit
Straight-line cost 30.00 Rs per hour
Overtime cost 45.00 Rs per hour
 Aggregate Production Planning
Requirements
Jan Feb March April June
Beginning Inventory 500 0 0 0 0
Demand Forecast 10,000 10,000 10000 10000 10000
Safety Stock 0 0 0 0 0
Production Requirement 9,500 10,000 10,000 10,000 10,000
Ending Inventory 0 0 0 0 0

July Aug Sept Oct Nov Dec

0 0 0 0 0 0
11000 13000 18000 25000 30000 10000
0 0 0 0 0 0
11,000 13,000 18,000 25,000 30,000 10,000
0 0 0 0 0 0
Comparison of Four
Plans        
Cost Plan 1 Plan 2 Plan 3 Plan 4
Hiring 81,99,000 0 0 0

Layoff 2,20,00,000 0 0 0
Excess inventory 0 60,29,600 0 62,81,400
Shortage 0 84,50,000 0 0

Subconstract 0 0 38,970,000 0
Overtime 0 0 0 33,97,500

Straight time 9,39,00,000 9,39,01,500 6,27,16,500 9,41,98,500

12,40,99,00 10,83,81,10 10,16,96,40 10,38,77,40
  0 0 0 0
Thank You