Supply Chain Management Spring

Supply Chain Management Spring 
Part 1 
DeWOLT, a specialty handtool manufacturer, uses its Bristol, CT, facility to produce two product categories: drills and sanders. Communication with customers has indicated a demand forecast for each category over the next 12 months (in thousands of units) to be as shown below
Month
Drills Demand
Sanders Demand
January February March April May June
July August September October November December
1,800 1,600 2,600 2,500 800 1,800 1,200 1,400 2,500 2,800 1,000 1,000
1,600 1,400 1,500 2,000 1,500 900 700 800 1,400 1,700 800 900
The process is primarily an assembly operation, and capacity is driven by the number of people on the production line. The plant operates 20 days a month, eight hours each day. Production of a drill takes 20 minutes, and production of a sander requires 10 minutes of worker time. Each worker is paid $10 per hour with a 50 percent premium for any overtime. The plant currently has 6,300 employees. Overtime is limited to 20 hours per employee per month. The plant currently maintains 100,000 drills and 50,000 sanders in inventory. The cost of holding a drill in inventory is $2 per month, and the cost of holding a sander in inventory is $1 per month. The holding cost increases because products are paid for by the customer at existing market rates when purchased. Thus, if DeWOLT produces early and holds in inventory, the company recovers less given the rapidly dropping prices.
Using excel for your analyses, please answer the following questions (copy/paste the relevant excel tables within your answer).
1.
2.
3.
Assuming no backlogs, no subcontracting, no layoffs, and no new hires, what is the optimum production schedule for DeWOLT? 
Assuming no backlogs, no subcontracting, no layoffs, and no new hires, what is the annual cost of the optimum production schedule? 
The workers union wants to negotiate an increase of allowed overtime per employee per month from 20 hours to 40. Would you advise management to allow such increase? Indicate clearly what variables are affected by this change. 
4. In light of the negotiation with the workers union, DeWOLT is considering the option of changing its workforce size with demand. The cost of hiring a new employee is $700 and the cost of a layoff is $1,000. It takes an employee two months to reach full production capacity. During those two months, a new employee provides only 50 percent productivity. Anticipating a similar demand pattern next year, DeWOLT aims to end the year with 6,300 employees.
a. What is the optimal production, hiring, and layoff schedule? 
b. What is the cost of such schedule? 
c. If DeWOLT could improve its training so that new employee achieve full productivity
right away, how much improvement in annual cost would the company see?
d. How would the hiring and layoff policy during the year affected by the improved
training? 
Part 2
Explain the two situations in which managers use network design models in supply chain management.
Part 3
You are asked to assist in the process of improving your company’s supply chain performance. One of the tasks involved the implementation of aggregate planning. Discuss the key issues to be considered when implementing aggregate planning