Question
Deb Bishop Health and Beauty Products has developed a new shampoo, and you need to develop its aggregate schedule. The cost accounting department has supplied
Deb Bishop Health and Beauty Products has developed a new shampoo, and you need to develop its aggregate schedule. The cost accounting department has supplied you the costs relevant to the aggregate plan, and the marketing department has provided a four-quarter forecast. All are shown as follows:
Quarter | Forecast |
1 | 1,400 |
2 | 1,200 |
3 | 1,500 |
4 | 1,300 |
Costs:
Previous Quarters Output | 1,500 units |
Beginning Inventory | 100 units |
Stock-out | $50 per unit |
Inventory Holding Costs | $10 per unit |
Hiring Workers | $40 per unit |
Layoff Workers | $80 per unit |
Unit Cost | $30 per unit |
Overtime Cost | $15 extra per unit ($45) |
Subcontracting | $60 per unit |
Your job is to develop an aggregate plan for the next four quarters.
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Plan A - Hire or fire to produce the prior quarter's demand. What is the cost of this plan? $ [ Select ] ["220,500", "215,900", "214,000", "178,000"]
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Plan B - Adopt a level strategy where one holds the employment steady to produce an average demand. What is the cost of this plan? $ [ Select ] ["195,600", "178,000", "212,225", "169,500"]
- Plan C - Utilize a mixed strategy, first produce at a level production rate of 900 per quarter, then utilizing overtime with a cap of 200 units, then subcontracting. What is the cost of this plan? $ [ Select ] ["250,000", "246,000", "151,900", "257,300"]
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Which is the more economical plan for Deb Bishop Health and Beauty Products? [ Select ] ["Plan C", "Plan B", "Plan A"]
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