The V.P of Marketing is not all that happy with the large volume of backorders in your plan from question 1A . She asks that you develop a plan that results in no backorders at any time during the year. The V.P. of manufacturing says that he will insist that any such plan specify level output each quarter. The V.P. of Finance states that you no longer need to have a Qtr. IV ending inventory of 2000 units.

Using the original forecast data, beginning inventory, starting number of full time employees, etc. from problem 1, develop a plan that will meet the requirements of all three V.P.’s.

On Dec. 22 the V.P. Finance informs you that the availability of capital will be extremely tight next year. As a consequence, he asks you to develop a radically different type of aggregate plan based on a “Chase” strategy. Ending inventory and backorders is to be zero at the end of each quarter. The V.P. Manufacturing says he realizes this type of strategy will require him to abandon his beloved “level” strategy and for you to vary the total output rate from one quarter to another. The productivity planning factors for each type of output are repeated here (note that there are some limits in a couple of the categories).

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