Index

S.No.

Detail

Facts of case

Mixed Strategy

Overtime Strategy

Chase Strategy

Level 1 - No overtime

Level 2- No backordering

Results and comparison

Back
Fact of the case
Standard

Qty

Workers
Productivity/ hour
Working Hours
No of Days
Beginning Inventory
Inventory holding (rate)

30
0.5
8
60
500
5

Cost type
Back ordering
Overtime
Hiring
Firing
Straight time

Rate
(in INR)
10
8
100
200
5

Measurement
unit
number
ratio
/day
/season (quarter)
units
/unit/quarter
Measurement
unit
/unit
/hour
/worker
/worker
/hour

Other constraints
1. Hiring and firing only in SUMMER
2. Overtime only in WINTER or SPRING
3. No stock-out in WINTER or SPRING (demand must be met)
4. No overtime in FALL

Back

401
OT
WINTER

FALL
FORECAST
BEGINNING INV.
PRODUCTION REQD.

10401
500
9901

8401
-2701
11102

PROD.HRS REQD.

19802

22204

DAYS
WORKERS WORKING
PROD.HRS AVAILABLE

60
30
14400

60
30
14400

OVERTIME
HIRING
FIRING
ACTUAL PROD.HRS
ACTUAL PRODUCTION
NET WORKERS WORKING
ENDING INVENTORY
COST
BACKORDERING
OVERTIME
HIRING
FIRING
INV. HOLDING
REGULAR COST
TOTAL

7804

14400
7200
30
-2701

22204
11102
30
0

27010
62432

0
72000
99010

0
72000
134432

OT
SPRING

H/F
SUMMER
7401
0
7401

12401
0
12401

14802

24802

60
30
14400

60
30
14400

Points to be considered
1. Hiring and firing only in SUMMER
2. Overtime only in WINTER or SPRING
3. No stock-out in WINTER or SPRING (demand m
4. No overtime in FALL

402
22
22
14802
7401
30
0

24960
12480
52
79

3216

0
72000
75216

2200
4400
395
124800
131795

440453

y in SUMMER
NTER or SPRING
TER or SPRING (demand must be met)
L

Back

401
OT
WINTER

FALL
FORECAST
BEGINNING INV.
PRODUCTION REQD.

10401
500
9901

8401
0
8401

PROD.HRS REQD.

19802

16802

DAYS
WORKERS WORKING
PROD.HRS AVAILABLE

60
30
14400

60
30
14400

5402

2402

19802
9901
30
0

16802
8401
30
0

0
43216

19216

0
72000
115216

0
72000
91216

OVERTIME
HIRING
FIRING
ACTUAL PROD.HRS
ACTUAL PRODUCTION
NET WORKERS WORKING
ENDING INVENTORY
COST
BACKORDERING
OVERTIME
HIRING
FIRING
INV. HOLDING
REGULAR COST
TOTAL

OT
SPRING

H/F
SUMMER
7401
0
7401

12401
0
12401

14802

24802

60
30
14400

60
30
14400

402

10402

14802
7401
30
0

24802
12401
30
0

3216

83216
0
0
0
72000
155216

0
72000
75216

436864

Back

401
FALL

WINTER

FORECAST
BEGINNING INV.
PRODUCTION REQD.

10401
500
9901

8401
0
8401

PROD.HRS REQD.

19802

16802

DAYS
WORKERS WORKING
PROD.HRS AVAILABLE

60
30
14400

60
42
20160

12
0

0
6

20160
9901
42
0

17280
8401
36
0

1200
0
0
100800
102000

0
1200
0
86400
87600

OVERTIME
HIRING
FIRING
ACTUAL PROD.HRS
ACTUAL PRODUCTION
NET WORKERS WORKING
ENDING INVENTORY
COST
BACKORDERING
OVERTIME
HIRING
FIRING
INV. HOLDING
REGULAR COST
TOTAL

SPRING

SUMMER
7401
0
7401

12401
0
12401

14802

24802

60
36
17280

60
30
14400

0
5

22
22

14880
7401
30
0

14400
12401
52
0

0
1000
0
72000
73000

2200
4400
0
124800
131400

Conditions
Hiring - firing
End inventory - ZERO
Just meet the demand in that quarter

394000

meet the demand in that quarter

Back

401
FALL

FORECAST
BEGINNING INV.
PRODUCTION REQD.

WINTER
10401
500
9901

8401

Net Demand
Cumulative Demand
DAYS
Cumulative Days
Actual Production

9901
9901
60
60
9526

8401
18302
60
120
19052

ENDING INVENTORY

-375

750

30
42
12

30
42
12

Actual Labor
Net workers working
Additional hiring

8401

Cost
BACKORDERING
OVERTIME
HIRING
FIRING
INV. HOLDING
REGULAR COST

0
100800

3750
100800

TOTAL

105750

104550

3750
1200

SPRING

SUMMER

Production required per day

7401

12401

7401

12401

7401
25703
60
180
28578

12401
38104
60 Prod/day
240 158.7667
38104

2875

30
42
12

30
42
12

Production hrs. required

No. of hrs by 1 worker in 1 day
No. of workers required

45000

Cumulative Demand
Actual Production

40000
35000
30000
25000
19052

20000

14375
100800

2400
0
100800

115175

103200

18302

15000
9526
10000

428675

9901
5000
0
60

120

165.02 units/day

330.03
8
41.25
42

38104
38104
28578

25703
19052
18302

120

180

240

Back

401
FALL

FORECAST
BEGINNING INV.
PRODUCTION REQD.
Net Demand
Cumulative Demand
DAYS
Cumulative Days
Actual Production
ENDING INVENTORY
Actual Labor
Net workers working
Additional hiring

WINTER
10401
500
9901

8401

9901
9901
60
60
9901

8401
18302
60
120
19802

1500

30
42
12

30
42
12

8401

Cost
BACKORDERING
OVERTIME
HIRING
FIRING
INV. HOLDING
REGULAR COST

0
100800

7500
100800

TOTAL

102000

108300

0
1200

SPRING

Without shortage
Production required per day

SUMMER
7401

12401

7401

12401

7401
25703
60
180
29703

12401
38104
60
240
39604

4000

1500

30
42
12

30
42
12

20000
100800

2400
7500
100800

120800

110700

Production hrs. required

No. of hrs by 1 worker in 1 day
No. of workers required

441800

165.02

330.03
8
41.25
42

Back
Strategy
Mixed
Overtime
Chase
Level - No overtime
Level - No backordering

Total Cost
440453
436864
394000
428675
441800

We need to adopt Chase Strategy for the plannning in this case