Crystal Clear Health Drinks: A health drink production company, Crystal Clear Health Drinks, decides to introduce a new line of health drink that will include several flavours. The marketing team forecasts an increase in demand for the new line of product; this is due to the growing popularity of the idea of living healthier lifestyles. They prepare the following aggregate forecasts (tank loads of several flavours) for the next six-month planning horizon: May: 50 June: 60 July: 70 August: 90 September: 80 October: 70 The operations team prepared the following information: 1. The production line has the capacity to produce 60 tank loads per month in regular time at the cost of R10,000 per tank load. 2. Overtime production and subcontracting to the available suppliers cost R16,000 and R18,000 per tank load, respectively. 3. The cost to hold one tank load for one month is R2,000. 4. Demand can also be back-ordered at the cost of R5,000 per month. 5. The company has no starting inventory and wishes to end up on the planning horizon with no inventory on hand. Question 1 How would aggregate planning for Red Fish differ from Crystal Clear Health Drinks? I
Crystal Clear Health Drinks:
A health drink production company, Crystal Clear Health Drinks, decides to introduce a new line of health drink that will include several flavours. The marketing team
They prepare the following aggregate forecasts (tank loads of several flavours) for the next six-month planning horizon:
May: 50
June: 60
July: 70
August: 90
September: 80
October: 70
The operations team prepared the following information:
1. The production line has the capacity to produce 60 tank loads per month in regular time at the cost of R10,000 per tank load.
2. Overtime production and subcontracting to the available suppliers cost R16,000 and R18,000 per tank load, respectively.
3. The cost to hold one tank load for one month is R2,000.
4. Demand can also be back-ordered at the cost of R5,000 per month.
5. The company has no starting inventory and wishes to end up on the planning horizon with no inventory on hand.
Question 1
How would aggregate planning for Red Fish differ from Crystal Clear Health Drinks? Identify and discuss four key differences between the two different sectors involved and the various strategies available.
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