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LEVEL PRODUCTION STRATEGY
We are going to find the requirements for the entire period of the plan and also produce the average amount that is needed per month in order to meet the plan.
First we are going to determine the total average requirements per month:
Avg. requirements = total number of requirements – opening inv. + closing inv.
Avg. requirements, therefore = (9000 – 700 + 100)/6 = 1400 units/period
- Entering the production data
- We will then determine the hire/fire rate to get to production level that is desired
- All inventory levels will then be updated
- We will also check whether the inventory is going to run out – If it does recalculate average production needed and go to step 1
- Calculate totals for each category
- Calculate costs
- Regular production costs:
- Inventory carrying costs:
- Hiring Costs:
TOTAL Incurred COSTS: _________
The aggregate planning that we are going to carry out will among other things attempt to match the level of bike supply to demand. It is going to determine the required quantities and the timing of inputs as well as outputs. There will also be making decisions on production, inventory, staffing and backorder levels.
The following are the forecasts for demand to meet:
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