Question
Aggregate demand for a product family is given in the table below for the 4 quarters of 2021. Production cost on regular time is $3
Aggregate demand for a product family is given in the table below for the 4 quarters of 2021. Production cost on regular time is $3 per unit. The inventory cost is $1 per unit per quarter. Demand that cannot be met is a lost sale and accounted for at $9 per unit. When necessary, up to 100 units can be subcontracted at a cost of $5 per unit. Labor fluctuation costs are accounted for by costs of changes in production level: each unit of increase in production is accounted for at $2 per unit of increase and $1 per unit of decrease. The aggregate planning technique being considered is level production. That is, the production level is the same for each quarter. Compute the total annual cost of meeting demand for 2021. (Determine the number of units to produce in each month for level production (Total demand - initial inventory)/4. Then for each month, compute the number of units to be subcontracted, the inventory, and the lost sales). Report as a whole number with no commas.
Quarter | Demand | Production | Inventory | Lost Sale |
---|---|---|---|---|
| 300 | 0 | ||
Win21 | 1000 | ? | ? | ? |
Spr21 | 800 | ? | ? | ? |
Sum21 | 300 | ? | ? | ? |
Fal21 | 600 | ? | ? | ? |
Answer:
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started