Aggregate Planning

Planning the overall use of the

organizations assets
Applied Management Science for Decision Making, 1e 2012 Pearson Prentice-Hall, Inc.

Philip A. Vaccaro , PhD

OVERVIEW
Objectives

Definition of the Quasi-Unit

Strategies
Computer Applications

Master Production Schedule

Aggregate Planning Definition

The overall employment of the firms facilities and

other resources over the next 3 to 18 months so as
to satisfy customer demand for all goods and services
at minimum cost, as well as certain corporate policies
such as no layoffs and no overtime pay.

Corporate Policy
Requirements
EXAMPLES

A stable work force

100% in-house production
Sufficient inventories to reduce the

likelihood of stockouts to =< 5%

Overtime labor hours not to exceed
10% of all regular labor hours

The Quasi-Unit
A unit of product that is representative of

all the firms goods and services.

Examples are appliances and vehicles in

manufacturing.
Examples are airline passenger miles flown

and restaurant meals in the service sector.

The Meal Quasi-Unit

RESTAURANT

x ounces of meat
x ounces of fish
x ounces of poultry
x gallons of water for
cooking / cleaning
x amount of gas and
electricity for cooking

x amount of labor time

and cost for cooking

x amount of labor time
and cost for serving
x ounces of vegetables
of various types
And much more!

The Quasi - Unit

MANUFACTURING

Gallons of Beer
Not individual brands, bottles, kegs, cans, varieties

Tons of Steel
Not ingots or beams of varying tensile strength

The Quasi - Unit

SERVICE SECTOR

Faculty-to-Student Contact Hours

Transcends the number of hours of classroom
instruction, student advising, directed studies,
internships, and so on.

Airline Passenger Miles Flown

Transcends the number of flights by specific
aircraft over specific routes.

The Pseudo / Composite Unit

ALTERNATE NAMES FOR THE QUASI - UNIT

Sometimes, the unit does not exist at all!

It is a collection of square feet of sheet metal,
several dozen screws or bolts, a variety of
components, assemblies, ounces of glue,
paint, fabric, and so on.
STRICTLY USED FOR
PLANNING PURPOSES

The New Quasi - Unit Definition

A SINGLE PRODUCT representing
a family of individual products that:

are processed on the same machines

are processed by the same workers
share the same general machine setup
have similar cost structures, carry
costs, and output rates
share more / less the same parts and
assemblies as well as physical characteristics

Quasi-Unit Interpretations
Other

Mid-sized Product

in a line of similar products

( autos, refrigerators )

Only Product made in a particular manufacturing

plant
Basic Product with minor differences between
models
Hybrid Product or cross between several types
of products produced in one or more plants

Basic Product with Minor Differences

UNITED STATES
MEXICO

Basic Product with Minor Differences

2013 Ford Fusion

2013 Lincoln MKZ

Basic Product with Minor Differences

2013 Ford Fusion

2013 Lincoln MKZ

Overview of the Process

AGGREGATE PLANNING

A quasi-unit demand forecast is developed

for 3 to 18 months into the future.

The firm then manipulates production rates,

inventory levels, and work force levels to

generate a series of aggregate plans that
meet the forecasted demand.

Overview of the Process

AGGREGATE PLANNING

Cost estimates are developed and the lowest

cost aggregate plan is adopted.

Plan is then decomposed or disaggregated

into a series of master production schedules
that specify the exact number of products and
services to be generated on a daily, weekly, or
monthly basis. ( by make, model, color, and options )

The Aggregate Plan

MINIMUM DATA REQUIREMENTS

I.
II.
III.

Specified production rate for each time

period.
Specified level of inventory for each time
period.
Specified labor force size for each time
period. *
* ( USUALLY 1 MONTH OR 1 QUARTER )

The Three Principal Strategies

AGGREGATE PLANNING

Inventory Cushion or Level Work Force

Skeleton Force or Cadre
Chase or Matching

Inventory Cushion Strategy

Labor force size is fixed.

Production rate is fixed.
Inventories rise during slow demand periods.

Inventories shrink during high demand periods.

Inventory stockout costs are reduced.
Overtime pay, hiring, firing, subcontracting, and

production rate change costs are eliminated.

The Inventory Cushion

DURING
HIGH
DEMAND
DECREASES

DURING
LOW
DEMAND
INCREASES

THE INVENTORY CUSHION INSULATES THE FACTORY FROM DEMAND FLUCTUATIONS

Skeleton Force or Cadre

Strategy
The permanent labor force size is usually set for
the lowest monthly or quarterly forecasted quasiunit demand.
Higher demand must then be met by scheduling
overtime, hiring temporary workers, subcontracting, and so on.

Lower demand, if any, is tolerated as paid idle time.

SKELETON FORCE
STRATEGY U.S. ARMY
$100,000.
TO PAY
AND
EQUIP
EACH
SOLDIER

$25,000.
TO PAY
AND
EQUIP
EACH
SOLDIER

PERMANENT
WORK FORCE

PART-TIME
WORK FORCE

ACTIVE DUTY
480,000
46%

RESERVE / NATIONAL GUARD

563,000
54%

RETIRED AND STANDBY RESERVES ACTIVATED ONLY IF ABSOLUTELY NECESSARY - 12,000,000 TROOPS

SKELETON FORCE
HIGHER
STRATEGY EDUCATION

In 1984, full-time faculty were 80% of all faculty

In 1987, full-time faculty were 67% of all faculty

In 2001, full-time faculty were 55% of all faculty
In 2003, full-time faculty were 50% of all faculty
BETWEEN 1995 1997, 67% OF ALL NEW PROFESSORS
WERE HIRED AS ADJUNCTS, IN ORDER TO SAVE $$$

Chase or Matching Strategy

Calls for monthly / quarterly adjustment of the

labor force size as necessary to match production to demand.

Eliminates or reduces inventory carry costs and

stockout costs.
It generates substantial hiring, training, and

termination costs and risks the degradation of

employee morale and loyalty.

Two Types of Costs

Those that WILL

change from one
developed plan
to the next

RELEVANT

Those that WILL NOT

change from one
developed plan
to the next

NON-RELEVANT

NON-RELEVANT COSTS ARE OMITTED FROM THE

AGGREGATE PLANNING ANALYSIS SINCE THEY DO
NOT ASSIST THE PLANNER IN IDENTIFYING THE
MOST COST- EFFECTIVE PLAN.

THEIR INCLUSION WOULD NOT DIFFERENTIATE ONE PLAN FROM ANOTHER

Possible Plan Costs

AGGREGATE PLANNING

Regular Hourly Labor

Rate
Overtime Hourly Labor
Rate
Direct Labor Unit Cost
Direct Materials Unit
Cost
Overhead Unit Cost
Labor Severance Cost
per Unit

Subcontracting Unit

Cost
Inventory Unit Carry
Cost
Inventory Unit Stockout
Cost
Production Rate
Change Costs
Labor Hire/Train Cost
per Unit

Possible Data Input

AGGREGATE PLANNING

Productivity per worker

Required labor hours

per day
Number of production
days in the plan
Accurate monthly or
quarterly demand
forecasts
Existing plant capacity

per unit
Required direct
materials per unit
Corporate policy
regarding overtime,
subcontracting,
backordering, etc.
Machine processing
hours per unit

Possible Decision Variables

AGGREGATE PLANNING

USEFUL FOR DEVELOPING

ALTERNATIVE PLANS
UNDER VARIOUS
STRATEGIES

Production Rate Changes

Production Subcontracting
Overtime Labor Hours
Equipment Rental
Backordering
Temporary Employees
Part-time Employees

The Selected Aggregate Plan

ALMOST ALWAYS IT IS A MIXED STRATEGY CHARACTERIZED BY :

MODERATE INVENTORY LEVELS

MODERATE STOCKOUT COSTS
A SMALL NUMBER OF PRODUCTION
RATE CHANGES WITH RELATIVELY
SMALL MAGNITUDES
The
4th
Strategy

Aggregate Planning
TWO STARTING ASSUMPTIONS

PASSIVE

AGGRESSIVE

ASSUMES THE
PRODUCT
DEMAND
PATTERN
CANNOT BE
ALTERED

ASSUMES THE
PRODUCT
DEMAND
PATTERN
CAN BE
ALTERED
IF NECESSARY

Product Demand Pattern

PRE - STABILIZATION

( units )

THE DEMAND RATE MAY VARY DRAMATICALLY

FROM THE NORMAL PRODUCTION RATE,
MAKING AGGREGATE PLANNING DIFFICULT
AND LESS COST EFFECTIVE

Variable Product Demand

( time )

Product Demand Pattern

STABILIZATION

( units )

THE LEVELING OF DEMAND TO APPROACH

THE NORMAL PRODUCTION RATE MAKES
AGGREGATE PLANNING MUCH EASIER
AND MORE COST EFFECTIVE

Variable Product Demand

( time )

Some
Demand
Leveling
Tactics
Heavy advertising, price discounts, coupons,
and contests during periods of low demand.
Little or no advertising and price increases
during periods of high demand.
Production of countercyclic, similar products.
Reservation systems.

Aggregate Planning with

QM for Windows

WE SELECT
We Select
AGGREGATE
Aggregate Planning
PLANNING
From The Menu
FROM THE MENU

WE DESIRE TO
SET UP A
NEW PROGRAM To

We Select The
WE SELECT
THE
1st
FIRST OPTION
Menu

THE DIALOGUE
BOX APPEARS

WE SELECT SIX PERIODS

FOR THE AGGREGATE PLAN
AND LABEL THEM
JANUARY THROUGH
JUNE

IF DEMAND EXCEEDS
PRODUCT SUPPLY IN
ANY MONTHLY PERIOD,
IT IS ASSUMED THOSE
SALES ARE LOST FOREVER

THE DATA TABLE

APPEARS

Inventory Cushion Strategy

EXAMPLE

OBJECTIVE
TO MAINTAIN A CONSTANT-SIZE WORK FORCE AND UNIFORM PRODUCTION
RATE OVER THE SPECIFIED PLANNING PERIOD.

ASSUMPTIONS
DEMAND FORECAST OF 6,200 QUASI-UNITS OVER THE NEXT SIX MONTHS
ONE-HUNDRED-TWENTY- FOUR AVAILABLE PRODUCTION DAYS
QUASI-UNIT INVENTORY CARRY COST IS $5.00 PER MONTH
EACH WORKER PRODUCES FIVE QUASI-UNITS PER DAY
EACH WORKER IS PAID $120.00 PER DAY

Inventory Cushion Strategy

FIRM MUST PRODUCE 50 UNITS DAILY IN ORDER TO
MEET THE SIX-MONTH DEMAND ( 6,200 / 124 DAYS )

22 DAYS
AVAILABLE
X
50 UNITS
DAILY
18 DAYS
AVAILABLE
X
50 UNITS
DAILY
21 DAYS
AVAILABLE
X
50 UNITS
DAILY

CALENDAR
MONTH

ACTUAL
PRODUCTION

QUASI-UNIT
FORECAST

CUSHION
NET CHANGE

ENDING
INVENTORY

JAN
FEB
MAR
APR
MAY
JUN

1100
900
1050
1050
1100
1000

900
700
800
1200
1500
1100

+200
+200
+250
- 150
- 400
- 100

200
400
650
500
100
0

6200

6200

1850

units

units

units

Quasi-Unit
Demand
Forecasts

Planned
Monthly
Production

1.6 hours of labor per quasi-unit

X
$15.00 / hour average labor rate

Quasi-Unit
Inventory
Carry Cost
per
Month

Inventory Cushion Strategy

EXAMPLE

TOTAL COSTS: $158,050.00

INVENTORY CARRY COSTS....$9,250.00 ( 1,850 units x $5.00/unit )
OVERTIME, HIRE/FIRE, SUBCONTRACTING..............$0.00 ( fixed work force )
PRODUCTION RATE CHANGE COSTS$0.00 ( uniform production rate )

LABOR COSTS..$148,800.00..( 50/5 = 10 workers x $120.00/day x 124 days)

Strategy Total Cost

Total Labor Cost

Total Inventory Carry Costs

Quasi-Unit Demand

Regular Time
Quasi-Unit Production

The Inventory Cushion

( peaks at mid-term of plan )

Skeleton Force Strategy

EXAMPLE

OBJECTIVE
TO BUILD A PERMANENT LABOR FORCE AROUND A SPECIFIC LEVEL OF
DEMAND, TOLERATING PAID IDLE TIME DURING LOWER DEMAND
PERIODS AND INCURRING COSTS OF OVERTIME LABOR OR
SUBCONTRACTING DURING HIGHER DEMAND PERIODS.

THE SPECIFIC LEVEL OF DEMAND IS USUALLY

THE LOWEST LEVEL OF DEMAND

Skeleton Force Strategy

EXAMPLE

ASSUMPTIONS
A PERMANENT LABOR FORCE BUILT AROUND THE LOWEST DEMAND PERIOD
IN ORDER TO SAVE ON RETIREMENT BENEFITS, HEALTH INSURANCE , PAID
VACATIONS, LEAVE, ETC.
FEBRUARY HAS THE LOWEST FORECASTED QUASI-UNIT DEMAND (700 units)
FEBRUARY HAS EIGHTEEN (18) AVAILABLE PRODUCTION DAYS
FIRM WANTS TO SUBCONTRACT PRODUCTION TO AN OUTSIDE COMPANY
WHENEVER QUASI-UNIT DEMAND EXCEEDS THE PERMANENT LABOR FORCE
CAPABILITY
SUBCONTRACTED QUASI-UNITS COST THE FIRM $10.00 EACH

Skeleton Force Strategy

EXAMPLE

CALCULATIONS
DAILY FEBRUARY PRODUCTION....700/18 days = 39 units daily
IN-HOUSE PRODUCTION..39 units/day x 124 days = 4,836 units
SUBCONTRACTED PRODUCTION.6,200 4,836 = 1,364 units

REQUIRED WORKERS..39/5 units per worker per day = 7.8

Over Production in Regular Time

Quasi-Unit
Subcontract
Cost

In February, in-house production was 39 units per day for 18 days = 702 quasi-units
which resulted in overproduction of 2 quasi-units

In March, in-house production was 39 units per day for 21 days = 819 quasi-units
which resulted in overproduction of 19 quasi-units
In April, in-house production was 39 units per day for 21 days = 819 units.
The shortfall seems to be ( 1200 - 819 ) = 381 units, but it was reduced to
360 quasi-units, due to the 21 quasi-unit surplus generated
in February and March

Skeleton Force Strategy

EXAMPLE

COSTS: $129,704.00
LABOR COST...$116,064.00 ( 7.8 workers x $120.00 per day x 124 days)
SUBCONTRACT COST..$13,640.00 (1,364 units x $10.00 per unit)
OVERTIME, HIRE/FIRE, TRAINING COSTS..$0.00 (rejected options)

INVENTORY CARRY COST..$0.00 (all demand satisfied exactly via

house production or subcontracting)

RT - Regular Time Production

Sub - Subcontracted Production

Subcontracting
Over Production
In
Regular Time

In-House Production
Shortfall
( Subcontracted )

Chase or Matching Strategy

EXAMPLE

OBJECTIVE
TO HIRE OR TERMINATE PERSONNEL AS NEEDED IN ORDER
TO MATCH PRODUCTION TO DEMAND, PERIOD-BY-PERIOD,
RESULTING IN THE ELIMINATION OR DRASTIC REDUCTION OF
BOTH INVENTORY CARRY AND STOCKOUT COSTS.

Chase or Matching Strategy

EXAMPLE

ASSUMPTIONS
EACH QUASI-UNIT REQUIRES 1.6 HOURS OF DIRECT LABOR
PERSONNEL TERMINATION COST IS PRORATED AT $15.00
PER MANUFACTURED QUASI-UNIT CANCELLED
PERSONNEL RECRUITING AND TRAINING COST IS PRORATED
AT $10.00 PER MANUFACTURED QUASI-UNIT ADDED
EACH WORKER EARNS $15.00 PER HOUR ON AVERAGE.

PRORATED TERMINATION COST

PRORATED HIRE/TRAIN COST

EXAMPLE: If sales were forecasted to be 100 units lower in the

next period, then the prorated employee termination
costs would be ( 100 x $15.00 ) $1500.00
If sales were forecasted to be 100 units higher in the
next period, then the prorated employee hiring and
training costs would be ( 100 x $10.00 ) $1000.00

The Chase Strategy

TOTAL MONTHLY COST = PRODUCTION + HIRE( FIRE ) COSTS

900 UNITS
x
1.6 HOURS
x
$15.00
=
$21,600.00

700 UNITS
X
1.6 HOURS
X
$15.00
=
$16,800.00

MONTH

DEMAND
FORECAST

PRODUCTION
COSTS

JAN

900

$21,600.

FEB
MAR

700
800

$16,800.

(200)x$15

$3,000.

$19,800.

$19,200.

100 x $10

$1,000.

$20,200.

APR

1200

$28,800.

400 x $10

$4,000.

$32,800.

MAY
JUN

1500
1100

$36,000.

300 x $10

$3,000.

$39,000.

$26,400.

(400)x$15

$6,000.

$32,400.

$8,000.
$9,000.

$165,800.

$148,800.

FORECAST
CHANGE

HIRE/FIRE
COSTS

TOTAL
COSTS

$21,600.

Chase or Matching Strategy

EXAMPLE

COSTS : $165,800.00
REGULAR TIME LABOR COST..$148,800.
6200 UNITS x 1.6 HOURS/UNIT = 9,920 HOURS x $15.00/HOUR

HIRE / TERMINATION COSTS..$17,000

$8,000.00 HIRE COSTS + $9,000.00 TERMINATION COSTS

INVENTORY CARRY AND STOCKOUT COSTS... $ 0.

PRODUCTION MATCHES DEMAND EXACTLY PERIOD-BY-PERIOD

$17,000.00 total
broken down
into hire/fire
and
termination

Period Demand = Period Production

CUMULATIVE
PRODUCTION
EQUALS
CUMULATIVE
DEMAND
( ONE IN THE SAME LINE )

Aggregate Plan Examples

POSTSCRIPT

I.

If only three strategies or plans were generated and

evaluated, the firm would select the skeleton force
since it has the lowest projected total costs.

II. Direct material cost, direct machine hour cost, and

applied overhead per quasi-unit were identical under
all three plans. Hence, they are non-relevant costs
and routinely omitted from the analysis.

The Relevant Range of Activity

PRODUCTION OF 6200 QUASI-UNITS
FALLS JUST WITHIN THE RELEVANT
COST RANGE OF 6000-8500 UNITS.
THEREFORE, UNIT DIRECT LABOR,
DIRECT MATERIALS, AND OVERHEAD
REMAIN THE SAME

VARIABLE COSTS

C
O
S
T
S

SEMI-VARIABLE
COSTS

Relevant Range 2
Relevant Range 3

6000

Relevant Range 1

8500

FIXED COSTS

6200

X
0

1000

2000

3000

4000

5000

6000

CUMULATIVE PRODUCTION ( IN UNITS )

7000

8000

Aggregate Plan Examples

POSTSCRIPT

III. The mix of resourceslabor force size, production

rate, and inventory level as well as subcontracting
----and their timing allowed the development of 3
unique aggregate plan proposals and associated
costs.
IV. In the skeleton force strategy, the firm elected to
augment the capacity of its small permanent labor
force by subcontracting exclusively. Variations of
this strategy could, and usually are generated using overtime hours, temporary labor hours, and
subcontracting exclusively or in combination.

Aggregate Plan Examples

POSTSCRIPT

V. Corporate policies may impose limitations on the

use of subcontracting, overtime hours, inventory
levels, production rates, machines, available days
for production, and so on.

Aggregate Planning with

QM for Windows
Transportation
Algorithm

Transportation Algorithm
Approach to Aggregate Planning
When aggregate planning is viewed as an allocation of
capacity to meet forecasted demand.
Produces an optimal plan for minimizing costs !

Can specify regular, overtime, and subcontracting

production in each time period.
Can specify inventory carryover from period to
period.
Will not handle non-linear costs such as hiring and
layoff.

Applied Management Science for Decision Making, 1e 2011 Pearson Prentice-Hall, Inc.

Philip A. Vaccaro , PhD

The number of quasi-units

that can be
subcontracted out
each month

Per Unit Labor Costs

Beginning Inventory ( from May )

50 Quasi-Units can be
produced on overtime
each month

Forecasted
Quasi-Unit
Demand
700 Quasi-Units can be
produced on
regular time
each month

Inventory Carry Costs

per Quasi-Unit
per Month

June demand of 800 is met by 50 units of beginning inventory, 700 units of June regular production,
and 50 units of June subcontracted production.
July demand of 1000 is met by 50 units of beginning inventory, 50 units of June overtime production,
700 units of July regular production, 50 units of July overtime production, and 150 units of subcontracted
July production.
August demand of 750 is met by 700 units of August regular production, and 50 units of August overtime
production.

For each month that a quasi-unit remains in inventory, an additional

$2.00 carry (holding) cost is added to its original cost

Also note that the dummy column

for unused capacity in each
month is missing in the original
transportation tableau !

This shows the costs and headings

to be inserted in each cell for the
normal transportation tableau,
if there had been one.
Note that cells that are not
allowed to be filled, have
a prohibitive cost of
$9,999.00 !

Total quasi-unit production

over the 3-month
aggregate plan

The only carry costs were for the

initial inventory of 100 quasi-units

Shows the total number of quasi-units

that should be made under
regular-time, overtime, and
subcontracting over the life of the
3-month aggregate plan.

Here, we are using the regular

transportation algorithm
module to solve the same
aggregate planning problem

For each month that a

quasi-unit is kept in
inventory, a $2.00
carry cost will be
added to its
original production
cost

 June demand of 800 was met by 100 units of beginning inventory (from May) and 700 units
of regular time production in June itself.
July demand of 1,000 was met by 50 units made overtime in June, 50 units subcontracted in
June, 700 units of regular time production in July itself, 50 units made overtime in July, and
150 units subcontracted in July.
August demand of 750 was met by 700 units of regular time production in August and 50
units made overtime in August.

The 1st feasible solution

The 2nd feasible solution

The 3rd feasible

and
optimal solution

Aggregate Planning

Sample Data
+
Basic Template

The Simplex Method

An alternative to the transportation method of
linear programming.
Must be employed where non-linear costs are
involved, such as hiring and layoff.
Minimum and maximum constraints can be put
on the desired amounts of regular labor, overtime
labor, subcontracting, backordering, and many
other factors on a monthly, bi-monthly, quarterly,
or semi-annual basis.

The Simplex Method

Constraint formulation is quite complex.

The optimal solution virtually always must be
obtained via computer.
Dozens or hundreds of variables are involved.

The Simplex Method

EXAMPLE

A production manager must develop an aggregate plan for the next

two quarters of the year. The plant produces computer terminals.
700 terminals need to be shipped to customers in the 1st quarter and
3,200 in the 2nd quarter. It is the firms policy to ship orders in the
quarter in which they are ordered.
It takes 5 hrs labor to produce each terminal, and only 9,000 hours
of straight-time labor is available in each of the two quarters.
Overtime can be used, but the firm limits overtime in each quarter
to 10% of straight-time labor available. Labor costs $12.00 per hour
at the straight-time rate and $18.00 per hour at the overtime rate.

The Simplex Method

If a terminal is produced in one quarter and shipped in the next
quarter, a carrying cost of $50.00 is incurred.
Requirement:
How many terminals should be produced on straight-time and
overtime in each of the two quarters to minimize straight-time
labor, overtime labor, and carrying costs?
The market requirements, straight-time labor availability, and
overtime policy must be adhered to.

The Simplex Method

Defining the Decision Variables

X1 = terminals made on straight-time in 1st quarter and shipped in 1st quarter.

X2 = terminals made on overtime in 1st quarter and shipped in the 1st quarter.
X3 = terminals made on straight-time in 1st quarter and shipped in the 2nd quarter.
X4 = terminals made on overtime in 1st quarter and shipped in the 2nd quarter.
X5 = terminals made on straight-time in 2nd quarter and shipped in the 2nd quarter.
X6 = terminals made on overtime in 2nd quarter and shipped in the 2nd quarter.
Q1 = 1st quarter ,

Q2 = 2nd quarter,

Z = total cost of the plan

The Simplex Method

The Model

Minimize Z = 60X1 + 90X2 + 110X3 + 140X4 + 60X5 + 90X6

Subject to:

X1 + X2

=>

X3 + X4 + X5 + X6
5X1

+ 5X3

=> 3,200 Q2 demand

=< 9,000 Q1 straight-time labor

5X5
5X2

700 Q1 demand

=< 9,000 Q2 straight-time labor

+ 5X4

5X6

=<

900 Q1 overtime labor

=<

900 Q2 overtime labor

Aggregate Planning with

QM for Windows
Simplex
Linear
Programming

X1 = 580 units made and shipped on straighttime in 1st Qtr

X2 = 120 units made on overtime and shipped
in 1st Qtr
X3 = 1,220 units made on straight-time in 1st
Qtr and shipped during 2nd Qtr
X5 = 1,800 units made and shipped on straighttime in 2nd Qtr
X6 = 180 units made on overtime in 2nd Qtr and
shipped in 2nd Qtr

Aggregate Planning

Applied Management Science for Decision Making, 1e 2012 Pearson Prentice-Hall, Inc.

Philip A. Vaccaro , PhD