10 Points Question 5 Using the information below: Costs table: $ 2 per unit per month Inventory carrying cost $ 30 per unit Subcontracting cost per unit $ 16 per hour Average pay rate 8 hours Working hours per day 4 units per day Daily productivity per worker Monthly forecasts: Month Jan Expected Demand 750 Production Days 23 700 20 Feb Mar 850 21 950 Apr May Jun 1,100 850 24 22 20 Evaluate each plan and find out which one is better in terms of total costs: - Plan 1: for the manufacturer is to maintain a constant workforce throughout the 6-month period. we assume that the production per day is average requirements (average production per day) and that we have a constant workforce, no overtime or idle time, no safety stock, and no subcontractors. The firm accumulates inventory during the slack period of demand, January through March, and depletes it during the higher-demand warm season, April through June. We assume beginning inventory = 0 and planned ending inventory = 0. a. Please fill the below tables for Plan 1 (4 points) Required daily production rate show calculations Required Number of workers to produce the Required daily production rate show calculations) Inventory calculations Month Production days Ending Total production Monthly units Inventory change inventory Jan Feb Mar Apr May June Plan 1 cost calculations calculate what is applicable to this plan) : Total Unit of inventory carries over from one month to the next Inventory Carrying Cost (show calculations) Total cost of workers during the plan period (show calculations) Total cost of Subcontractor (show calculations) Total Cost of Plan 1 Page 7 of 11 - Plan 2: is to maintain a constant workforce at a level necessary to meet the daily demand of January month and to meet all demand above this level by subcontracting. b. Please fill the below tables for Plan 2 (3 points) Required daily production rate show calculations) Total of units produced by the company In house) (show calculations) Required Number of workers to produce the Required daily production rate show calculations) Total of units produced by the subcontractor (show calculations) Plan 2 cost calculations calculate what is applicable to this plan) : Total Unit of inventory carries over from one month to the next Inventory Carrying Cost (show calculations) Total cost of workers during the plan period (show calculations) Total cost of Subcontractor (show calculations) Total Cost of Plan 2 c. Which plan should we select ? (1 points) Page 8 of 11 d. If the company decided to change the current subcontractor with a different one higher in quality and the new subcontractor charges 10 $ more than the previous one for each unit produced, based on this situation: how does the company's decision influence applying Plan 2 in term of cost? (1 Point How does this affect your answer in Part (c)? (1 Point)