COMM 225_ POM, W2012- SALES & OPERATIONS PLANNING (Ch. 14 and 14S) SOLUTIONS TO PRACTICE QUESTIONS Concordia University
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Course
COMM 225
Institution
Concordia University (
)
COMM 225_ POM, W2012- SALES & OPERATIONS PLANNING (Ch. 14 and 14S) SOLUTIONS TO PRACTICE QUESTIONS Concordia University
Q1 (Ref: Q. 14-1, p 637): Bioway, Inc., a manufacturer of medical supplies, uses aggregate planning to set labor
and inventory levels for the year. While a variety of items ar...
COMM 225_ POM, W2012- SALES &
OPERATIONS PLANNING (Ch. 14 and 14S)
SOLUTIONS TO PRACTICE QUESTIONS
Concordia University 2024-2025
Q1 (Ref: Q. 14-1, p 637): Bioway, Inc., a manufacturer of medical supplies, uses aggregate planning to set labor
and inventory levels for the year. While a variety of items are produced, a standard kit composed of basic supplies
is used for planning purposes. Demand varies with seasonal illnesses and the quarterly ordering policies of
hospitals. The average worker at Bioway can produce 1000 kits a month at a cost of $9 per kit during regular
production hours and $10 a kit during overtime production. Completed kits can also be purchased from outside
suppliers at $12 each. Inventory carrying costs are $2 per kit per month. Overtime is limited to regular production,
but subcontracting is unlimited. Due to high quality standards and extensive training, hiring and firing costs are
$1500 per worker. Bioway currently employs 25 workers. Given the demand forecast below, develop a six-month
aggregate production plan for Bioway using
(a) Chase demand and
(b) A mixed strategy where the current workforce is kept for April through August, and supplemented with
overtime and subcontracting as needed.
Pure strategy – Chase Demand (Note: Level production is not feasible because of April’s demand)
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