Inventory rows
Beginning(t) = Ending(t-1)
Ending(t) = Beginning(t) + Output(t) - Forecast(t)
Average(t) = ( Beginning(t) + Ending(t) ) / 2
Every aggregate plan. If Ending would be negative, set it to zero and put the shortfall in the backlog row.
- Output
- Regular time plus part time plus overtime plus subcontract
- Average
- The row the carrying charge is applied to
Total cost of an aggregate plan
Total = Regular units x regular rate
+ Overtime units x overtime rate
+ Part-time units x part-time rate
+ Subcontract units x subcontract rate
+ Hire/layoff cost
+ Total AVERAGE inventory x carrying rate
+ Backlog units x backorder rate
Costing any plan. Give a per-period total row as well, so an error can be localised.
- carrying rate
- Cost per unit per period, applied to average inventory
- backorder rate
- Cost per unit per period of unmet demand; usually much higher than the carrying rate
Production-days output
Monthly output = output per day x production days in the month
Level daily rate = total demand / total production days
When the problem gives working days per month. A constant daily rate gives an uneven monthly output.
- output per day
- Units the workforce produces in one working day
- production days
- Working days in that particular month