Solved: Climate Control, Inc., makes expedition-quality rain gear

Climate Control, Inc., makes expedition-quality rain gear for outdoor enthusiasts. Management prepared a forecast of sales (in suits) for next year and now must prepare a production plan. The company has traditionally maintained a level workforce strategy. All nine workers are treated like family and have been employed by the company for a number of years. Each employee can produce 1, 900 suits per month. At present, finished goods inventory holds 22, 100 suits. The demand forecast follows: a. Management is willing to authorize overtime in periods for which regular production and current levels of anticipation inventory do not satisfy demand. However, overtime must be strictly limited to no more than 20 percent of regular time capacity. Management wants to avoid stockouts and backorders and is not willing to accept a plan that calls for shortages. Assuming that overtime is only used in periods for which shortages would occur, it is not feasible to hold the workforce constant because (choose the correct answer below and fill in the free response boxes in your choice if appropriate): A after utilizing all regular and overtime production capacity, there are never any shortages. B. overtime is first required in month 6 and, after utilizing all regular and overtime production capacity, there is a shortage in that month of 380 suits. (Enter your responses as positive whole numbers.) b. Assume that management is not willing to authorize any overtime. Instead, management is willing to negotiate with customers so that backorders may be used as a supply option. However, management is not willing to carry more than 5, 600 suits from one month to the next in backorder. Assuming that a maximum backorder of 5, 600 suits may be maintained from month to month, it is not feasible to hold the workforce constant because (choose the correct answer below and fill in the free response boxes in your choice if appropriate): A. the maximum allowed backorder of 5, 600 suits is first exceeded in month 7, when there is a backorder of 11, 700 suits. (Enter your responses as positive whole numbers.) B backorders never exceed the maximum allowed backorder of 5, 600 suits. c. Assume management is willing to authorize the use of overtime over the next four months to build additional anticipation inventory. However, overtime must be strictly limited to no more than 20 percent of regular time capacity. Management wants to avoid stockouts and backorders and is not willing to accept a plan that calls for shortages. Assuming that overtime is only used in months 1 – 4, it is not feasible to hold the workforce constant because (choose the correct answer below and fill in the free response boxes in your choice if appropriate): A. after utilizing all regular and overtime production capacity, there are never any shortages. B- additional overtime of suits is required in month (Enter your responses as positive whole numbers.)

Expert Answer

1,909 answers

Month	1	2	3	4	5	6	7	8	9	10	11	12
Demand	23000	15500	13500	18000	30500	28000	25000	20500	12500	15000	19000	6000
Opening Stock	22100	19620	24640	31660	34180	20780	9880	1980	0	4600	6700	4800
Capacity per worker	1900	1900	1900	1900	1900	1900	1900	1900	1900	1900	1900	1900
No of workers	9	9	9	9	9	9	9	9	9	9	9	9
Total production capacity	17100	17100	17100	17100	17100	17100	17100	17100	17100	17100	17100	17100
Actual production	20520	20520	20520	20520	17100	17100	17100	17100	17100	17100	17100	17100
Overtime Production @20%	3420	3420	3420	3420	0	0	0	0	0	0	0	0
Ending Stock	19620	24640	31660	34180	20780	9880	1980	0	4600	6700	4800	15900
Shortage	0	0	0	0	0	0	0	1420

So 1420 suits in the month 8

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