The production supervisor of Gupta Furniture was tasked with selecting a mode of production that not only met the demand for the company’s best-selling product, the office interior chair, but also minimized the overall cost of production. The firm’s operations manager had stressed that the chosen production strategy should enable the company to meet demand at the lowest possible cost. As such, the brief was to prepare a comprehensive aggregate plan based on the forecasted demand scenario, considering how much to produce and when to produce in addition to determining which strategy among those traditionally applied would give the best results. The major challenge lay in planning and scheduling inventory, and determining regular production, overtime production, subcontracting, and employment levels over a medium term of 9 to 15 months, though both the short-term and long-term implications of these quantitative decisions also had to be taken into account.
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