Question
A small manufacturer of specialty welding equipment has developed a level production plan for the next four quarters. Note, however, that this plan is incomplete
A small manufacturer of specialty welding equipment has developed a levelproduction plan for the next four quarters. Note, however, that this plan is incomplete and requires that you first compute the ending inventory for each quarter (and assume there is no Pre-Q1 ending inventory) before you answer the questions below.
Supply/Demand Info | Pre-Q1 | Q1 | Q2 | Q3 | Q4 |
Forecast (demand) | 4,320 | 4,800 | 2,400 | 7,200 | |
Regular production | 4,680 | 4,680 | 4,680 | 4,680 | |
Subcontract production | |||||
Ending inventory | |||||
Hired employees | 1 | ||||
Fired employees | |||||
Total employees | 38 | 39 | 39 | 39 | 39 |
The table below shows additional relevant information:
CapacityInformation & Cost Variables | |
Production rate (units/employee/quarter) | 120 |
Subcontractor capacity (units/quarter) | 490 |
Regular production cost/unit | $67 |
Holding cost/unit/quarter | $13 |
Hiring cost/employee | $800 |
Firing cost/employee | $2,550 |
Subcontract cost/unit | $130 |
What is the overall total cost for this production plan? (Displayyour answer to the nearest whole number.) What is the total regular productioncost for this production plan? (Displayyour answer to the nearest whole number.) What is the total holdingcost for this production plan? (Displayyour answer to the nearest whole number.) What is the total hirecost for this production plan? (Displayyour answer to the nearest whole number.) What is the total firecost for this production plan? (Displayyour answer to the nearest whole number.)
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