A new start-up company is conducting a SOP meeting in order to "plan ahead" to effectively address the seasonal variation appearing in the annual demand of its products. Pedro, the planning manager is considering to use a planning horizon of 6 months and utilize the following information: Demand Forecast No. of Working Days *** Month January 1,800 22 February 1,500 19 March 1,100 21 April 900 21 May 1,100 22 June 1,600 20 Cost Breakdown Cost (Php) Material 100 per unit Inventory Holding 5 per unit per month Marginal Stock-out 10 per unit per month 20 per unit Marginal Cost of Subcontracting Hiring and Training Layoff 1,000 per worker 1,500 per worker Regular Labor Cost per Hour 15 per worker per hour 20 per worker per hour Overtime Labor Cost per Hour "Cost of buying less material costs Starting and Operating Conditions Current Inventory 400 units Current Workforce 38 workers Labor Hours per Unit 5 worker-hours/unit Regular Labor Time per Employee per Day 8 hours Inventory at the End of Each Month 25% of corresponding demand Cost Item a. Compute the production net requirements b. Determine the production cost of producing exactly the quantities required for each period through regular labor by varying the workforce. Use the table below for your final solution/answer. Month Labor Hiring Production Required Work Material Requirement Labor Costs Firing Cost Days Costs Cost Hours January February March April May June Total Cost A new start-up company is conducting a SOP meeting in order to "plan ahead" to effectively address the seasonal variation appearing in the annual demand of its products. Pedro, the planning manager is considering to use a planning horizon of 6 months and utilize the following information: Demand Forecast No. of Working Days *** Month January 1,800 22 February 1,500 19 March 1,100 21 April 900 21 May 1,100 22 June 1,600 20 Cost Breakdown Cost (Php) Material 100 per unit Inventory Holding 5 per unit per month Marginal Stock-out 10 per unit per month 20 per unit Marginal Cost of Subcontracting Hiring and Training Layoff 1,000 per worker 1,500 per worker Regular Labor Cost per Hour 15 per worker per hour 20 per worker per hour Overtime Labor Cost per Hour "Cost of buying less material costs Starting and Operating Conditions Current Inventory 400 units Current Workforce 38 workers Labor Hours per Unit 5 worker-hours/unit Regular Labor Time per Employee per Day 8 hours Inventory at the End of Each Month 25% of corresponding demand Cost Item a. Compute the production net requirements b. Determine the production cost of producing exactly the quantities required for each period through regular labor by varying the workforce. Use the table below for your final solution/answer. Month Labor Hiring Production Required Work Material Requirement Labor Costs Firing Cost Days Costs Cost Hours January February March April May June Total Cost
