Solution to Aggregate Planning Problem

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Solution:
Computation of:
Revenue
Simple returns = (service fee, $50) x no. of simple returns demand
Complex returns = (service fee, $200) x no. of complex returns demand
Cost of permanent employees
Payment for accountant = (regular rate, $600 per week) x no. of permanent accountant
Payment for computer system = (per computer rate, $175 per week) x no. of accountants who access to the computerized system
Total permanent costs = payment to accountant + payment for computer system
Computation of number of accountants needed per week based on expected demand:
Simple returns = total no. of expected demand for simple returns/no. of simple returns that an accountant can process.
Complex returns = total no. of expected demand for complex returns/no. of complex returns an accountant can process
No. of accountants to be hired = no. of accountant needed to meet expected demand – no. of permanent accountant
Cost of Temporary Accountants:
A. Number of temporary accountants (subtract five permanent accountants from the total)

Hiring fees = no. of accountants temporarily hired x hiring rate, $200
Payment for Accountant =no. of accountants hired x pay rate for temporary accountant, $600
Computer System = no. of accountants hired x computer rate, $175
Total Temporary Cost = Hiring fees + payment for accountants + Computer system payment
Total Cost = Total permanent costs + total temporary costs

B. In this case, we do not need to round up the number of accountants to meet demand in each period

Hiring fees = no. of accountants temporarily hired x hiring rate, $200
Payment for Accountant =no. of accountants hired x pay rate for temporary accountant, $600
Computer System = no. of accountants hired x computer rate, $175
Total Temporary Cost = Hiring fees + payment for...
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