SEMESTER FALL 2020
SUPPLY CHAIN MANAGEMENT (MGMT614)
Total marks: 10
Due date: 9th February, 2021
To help students understand how Aggregate Planning works in Supply Chain Management.
“Innovative Craftsmen” is a state of the art electronics manufacturing company which specializes in manufacturing LED TVs and LCD TVs. The majority of the raw materials used for both types of TVs are almost same with a small difference in the final assembly components. Since the raw materials are same, the company wishes to plan the production at the product family level instead of the SKU level. For this purpose, the company has decided to employ Aggregate Planning Strategy.
The company operates 20 days a month with an 8 hours shift daily. It takes 30 minutes for a worker to completely assemble a LED/LCD TV. The worker is paid Rs.100 per hour. It costs Rs.5000 to hire a worker if needed and Rs.7000 to fire a worker. The inventory carrying cost is Rs.50 per unit per month. Any unmet demand is backlogged and fulfilled from the production of the following period/month. The cost of backlogging is Rs.100 per unit per month. The material cost is Rs.500/unit.
The company has an initial inventory of 1000 units and an initial workforce of 15 people. The forecasted demand for six months is given as follows:
Being the supply chain manager of the company, your task is to decide whether a “Chase” or “Level” Strategy of Aggregate planning will be beneficial for the company based on the total costs.
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