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Bradford Manufacturing
Chapter 12 case Assignment #2

Aggregate Planning
• • • • • Setting the workforce levels Aggregate inventory levels Production rate 6-18 month horizon Product groups –rather than individual products

A strategy for how demand will be met, given current resource constraints. Why? key interface to capital budgeting process

Bradford Manufacturing
• Situation
–Prepare an aggregate plan(input to annual budget process) for pudding production – Packaging line

– Demand

• several machines linked by conveyors • mix pudding – packed – cased(48 box) – 160 caseson a pallet • four distribution centers • no setup time btwn flavors (from tech. impr.) • seasonal (peak at Thanksgiving, Christmas, Easter day) • promotion at the end of each quarter (by marketing)Bradford Manufacturing(cont.)
– Delivery
• Every day • Target inventory at DCs: 2 weeks of supply

– Past operation strategy
• limited storage capacity for finished goods produce close tosales

– Sales
• quarterly quotas forecasted (incentives for salespeople)

Bradford Manufacturing(cont.)
• Technical and economic information
– Currently 10 lines w/o overtime – 6 man for eachline – 7.5 hours per shifts (8 paid hours) – (overtime) up to 2 hours, if overtime, all the lines must run overtime – Payroll: $20/hour(regular), $30/hour(overtime) – Standard production rate: 450cases/hour

Bradford Manufacturing(cont.)
• Demand forecasts(unit: 1,000 cases) • Inventory targets • Costs
– – – – – – Q1-2,000, Q2-2,200, Q3-2,500, Q4-2,650, Q1(next yr)-2,200 – 2 weeks of supply –ending target: Q1-338, Q2-385, Q3-408, Q4-338 inventory carrying: $1.00 /case/yr initial inventory: 200 cases stockout costs: $2.40 /case hiring and training costs: $5,000 /employee laying off costs:$3,000 /employee

Bradford Manufacturing - Planning Plant Production 1,000 case units. 1st (1-13) Forecast Demand Ending Inventory Target 2,000 338

Quarter (Week Numbers) 2nd (14-26) 2,200 385...