1) Step by step work

The following table gives the demand and production plan for an organization.

January February March April

Demand 900 1,100 900 1,200

Production plan 1,000 1,000 1,000 1,000

The inventory holding cost is $3 per unit per month. Assuming initial inventory of 100 units, calculate the total inventory holding cost for the plan.

a) $1800

b) $1500

c) $1000

d) $800

e) None of the above

2).Step by step work

A company has the following forecast demand for the next five months:1,600, 2,400, 3,200, 2,800, and 2,400.The following information is also available.

current work force = 30

workdays/month = 20

labor hours/unit = 4

working time/day = 8

hiring cost/worker = $100

layoff cost/worker = $50

Inventory, stockouts, overtime, and subcontracting are not allowed.Only hiring and layoff are allowed to respond to fluctuations in demand.The total cost of hiring and layoff during the five-month period will be:

a) $1,500

b) $6,000

c) $2,250

d) $3,000

e) None of the above