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AGGREGATE PRODUCTION PLANNING PROBLEM 1

INFORMATION: January 2200 22 February 1500 19 March 1100 21 April 900 21 May 1100 22 June 1600 20 Total 8400 125

Demand forecast Working days

Material cost = $100 per garment Inventory holding cost = $1.5 per garment per month Stock out cost =$5 per garment per month Hiring cost & training cost = $200 per worker Firing cost = $250 per worker Labor hour required per garment = 5 hours Labor cost per hour = $4 (regular that is up to first 8 hours every day) Labor cost per hour = $6 (regular that is over first 8 hours every day) Subcontracting cost per garment = $125 Beginning inventory = 400 garments Number of workers currently employed = 30

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Highly fashioned and special skill for every operator. Make through production system. Push system.

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