A key hospital supplier, IVs Plus (IVP) located in Salina, KS sells IV tubing and stands to hospitals and clinics. Sales have picked up ever since they introduced their newest "Squeaky Clean" IV stand, which eliminates all oils and germs left behind by users. Though IVP sells these stands all year long, they sell the most during the summer months, when end-of-fiscal year purchases are at a peak. The demand over the next 12 months is shown in the table below. Use the demand forecasts and determine the lowest cost production plan. Month Forecast Month Forecast January 11.765 July 11,744 February 11.250 August 12.192 March 10,832 September 10,019 April 9.456 October 8,718 May 8,216 November 8,839 June 9,509 December 8,200 Regular production cost Holding cost Backorder cost Beginning Inventory Beginning workforce Regular production rate Hiring cost Firing cost $46 per unit $9 per unit per month based on ending inventory $45 per unit per month based on ending inventory 900 units 6 employees 325 units per employee per month $500 per worker $1,240 per worker Produce at a level rate using regular time production only. Backlogs are allowed in any month except December. Ending inventory is allowed in any month. Ending inventory in December should be as low as possible. What are the total costs incurred following the chase production strategy? - $6,128,320 - $6,437,243 - $5,585,012 - $7,323,465 A key hospital supplier, IVs Plus (IVP) located in Salina, KS sells IV tubing and stands to hospitals and clinics. Sales have picked up ever since they introduced their newest "Squeaky Clean" IV stand, which eliminates all oils and germs left behind by users. Though IVP sells these stands all year long, they sell the most during the summer months, when end-of-fiscal year purchases are at a peak. The demand over the next 12 months is shown in the table below. Use the demand forecasts and determine the lowest cost production plan. Month Forecast Month Forecast January 11.765 July 11,744 February 11.250 August 12.192 March 10,832 September 10,019 April 9.456 October 8,718 May 8,216 November 8,839 June 9,509 December 8,200 Regular production cost Holding cost Backorder cost Beginning Inventory Beginning workforce Regular production rate Hiring cost Firing cost $46 per unit $9 per unit per month based on ending inventory $45 per unit per month based on ending inventory 900 units 6 employees 325 units per employee per month $500 per worker $1,240 per worker Produce at a level rate using regular time production only. Backlogs are allowed in any month except December. Ending inventory is allowed in any month. Ending inventory in December should be as low as possible. What are the total costs incurred following the chase production strategy? - $6,128,320 - $6,437,243 - $5,585,012 - $7,323,465
