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Aggregate Production Planning Task 1

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21 views2 pages

Aggregate Production Planning Task 1

Uploaded by

bltur233
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Workshop Exercise: Integrated Production Planning

Task 1: Aggregate Planning

Calculate aggregate material cost/unit and aggregate net production time/unit.

Evaluate the production capacity/workforce.

1. Aggregate Material Cost per Unit


To calculate the aggregate material cost per unit, we find the weighted average material cost
based on the percentage share of units sold for each SKU:

Aggregate Material Cost per Unit = (Material Cost of S001 x Share of S001) + (Material Cost
of S002 x Share of S002) + (Material Cost of S003 x Share of S003)

Using the values:

- For S001: 62 x 20% = 12.4

- For S002: 90 x 65% = 58.5

- For S003: 86 x 15% = 12.9

Total Aggregate Material Cost per Unit = 12.4 + 58.5 + 12.9 = 83.8

2. Aggregate Net Production Time per Unit


To find the aggregate net production time per unit, we calculate the weighted average
production time for each SKU, similarly using the percentage share of units sold:

Aggregate Net Production Time per Unit = (Production Time of S001 x Share of S001) +
(Production Time of S002 x Share of S002) + (Production Time of S003 x Share of S003)

Using the values:

- For S001: 5 x 20% = 1.0

- For S002: 4.5 x 65% = 2.925

- For S003: 8.5 x 15% = 1.275

Total Aggregate Net Production Time per Unit = 1.0 + 2.925 + 1.275 = 5.2 hours

3. Production Capacity/Workforce
To determine production capacity per workforce, we use the available working hours and
the aggregate net production time per unit:

1. Calculate total available production hours per month:


Total Hours = Current Workforce x Working Days per Month x Working Hours per Day

Given: 20 workers, 20 days/month, and 8 hours/day

Total Hours = 20 x 20 x 8 = 3200 hours

2. Calculate monthly production capacity:

Monthly Production Capacity = Total Hours / Aggregate Net Production Time per Unit

Monthly Production Capacity = 3200 / 5.2 = 615.38 units (approx. 615 units)

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