Question
A solid-state drive (SSD) manufacturer projected that demand for the next six months will be as shown in the following table: Supply/demand information Beginning Ene
A solid-state drive (SSD) manufacturer projected that demand for the next six months will be as shown in the following table:
Supply/demand information | Beginning | Ene | Feb | Mar | Abr | Can | Jun |
Expected demand) | 48,000 | 52,000 | 60.000 | 54.000 | 58,000 | 64.000 | |
Regular production | |||||||
Overtime production | |||||||
Subcontracted production | |||||||
Finishing inventory | 6,000 | ||||||
hired employees | |||||||
laid off employees | |||||||
Total Employees | 200 |
Cost variables as follows:
Cost variables | |
Cost of labour/hour | $15 |
Cost per unit of overtime | $36 |
Outsourcing cost/unit | $32 |
Maintenance cost/unit/month | $10 |
Hiring cost/employee | $3,000 |
Dismissal cost/employee | $5,000 |
Here is additional relevant information (capacity):
Capacity information | |
Total Labor Hours/SSD | 2 |
Regular production units/employee/month | 200 |
Max regular production/month | 56,000 |
Maximum production of overtime/month | 4,000 |
Maximum subcontractor production/month | 5,000 |
Given the information above (and don't overlook the initial number of employees and inventory levels in the first table), create a chase production plan (zero leftover inventory each month) with the lowest possible total cost, making sure to use as much regular production as possible.
What is the regular production cost (during the six months from January to June) for a chase production plan?
What is the total production cost of overtime for this production plan?
What is the total subcontract cost for this production plan?
What is the total maintenance cost for this production plan?
What is the total rental cost for this production plan?
What is the total fire cost for this production plan?
What is the total cost (sum of all costs) for this production plan?
Step by Step Solution
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Step: 1
To create a chase production plan with the lowest possible total cost we need to match the production to the demand while minimizing the use of overtime subcontracting and other costs Heres the stepby...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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