# Purse Company produces a line of purses

**Chapter 13**

- The Purse Company produces a line of purses. The manager, Sally Smith, is interested in using a level aggregate plan. Inventories and backorders will be used to handle demand fluctuations. She has asked you to develop such a plan.

Use the following data to solve the first seven problems. | ||

Problem Data | ||

Cost data |
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Regular-time labor cost per hour | $17.00 | |

Overtime labor cost per hour | $21.00 | |

Subcontracting cost per unit (labor only) | $80.00 | |

Holding cost per unit per period | $13.00 | |

Back-order cost per unit per period | $20.00 | |

Hiring cost per employee | $550.00 | |

Firing cost per employee | $400.00 | |

Capacity data |
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Beginning workforce | 300 employees | |

Beginning inventory | 600 units | |

Labor standard per unit | 8 hours | |

Regular time available per period | 200 hours | |

Overtime available per period | 35 hours | |

Subcontracting maximum per period | 1200 units | |

Subcontracting minimum per period | 600 units | |

Demand data |
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Period 1 | 6000 units | |

Period 2 | 5000 units | |

Period 3 | 8000 units | |

Period 4 | 6000 units | |

Period 5 | 7000 units | |

Period 6 | 5000 units |

- Calculate the aggregate production rate.
- Calculate the appropriate workforce given the aggregate production rate. If Sally will need to hire workers, include this.
- Show what would happen if this plan were implemented.
- Evaluate the plan in terms of cost, customer service, operations, and human resources.

- Sally has decided that the Purse Company must have very good customer service. She has asked you to develop a level aggregate plan using inventories but not backorders. All demands must be met each period. You must:
- Calculate the aggregate production rate.
- Calculate the appropriate workforce given the aggregate production rate.
- Show what would happen if this plan were implemented.
- Calculate the costs of this plan.
- Evaluate the plan in terms of cost, customer service, operations, and human resources.

**Chapter 14**

- Courtney’s Culotte Pants (CCP) top product is its Model A. Using the information given, draw the product structure tree for Model A.

Use the following information for Problems 1 through 4. |
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Component |
Immediate Parent |
Usage per Parent |
Lead Time (weeks) |
Beginning Inventory |

A | none | — | 1 | 0 |

B | A | 2 | 2 | 250 |

C | A | 1 | 6 | 500 |

D | A | 3 | 3 | 750 |

E | A | 2 | 2 | 750 |

F | B | 4 | 2 | 3000 |

G | B | 2 | 4 | 1000 |

H | D | 3 | 2 | 5000 |

I | D | 2 | 4 | 5000 |

J | E | 1 | 8 | 1000 |

K | E | 5 | 1 | 5000 |

L | E | 2 | 4 | 2500 |

M | F | 3 | 3 | 250 |

N | F | 6 | 3 | 2560 |

O | H | 2 | 4 | 0 |

P | K | 1 | 2 | 500 |

Q | K | 2 | 3 | 1000 |

- Using the information given, calculate the replenishment time when no beginning inventory exists
- Courtney is preparing for her busy season and is building 2500 Model A culotte pants. Calculate the gross requirements for each component assuming that there is no beginning inventory.
- Using the information given and assuming that 2500 Model A culotte pants are scheduled for completion, calculate the gross requirements of each component. Use the beginning inventories given.

The citation for the book we are using is: Reid, R., D., and Nada R. Sanders. Operations Management: An Integrated Approach. Available from: Columbia College, (7th Edition). Wiley Global Education US, 2020.