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For the past 5 years, Archer's Burgers has produced frozen vegan burger patties via a combination of in-house manufacturing and subcontracting. Their historical plan' has

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For the past 5 years, Archer's Burgers has produced frozen vegan burger patties via a combination of in-house manufacturing and subcontracting. Their "historical plan' has always been to hold staffing steady and make 550 cases per month via regular time production at a cost of $65 per case. Previous Output is 450. They then utilized inventory and subcontracting to meet any additional monthly demand, as back-orders are not acceptable to their customers. The subcontractor, normally a direct competitor, charges Archer's $85 per case. There is currently 80 cases in inventory. The cost of increasing or decreasing capacity (hiring/layoff) is $5 per unit. Inventory costs $10 per case per Looking ahead, the operations manager forecasts demand of: Jan Feb March April May June 400 500 600 780 400 700 What would the costs be to continue to follow the 'historical plan? Select) The operations manager is considering a second plan. In this scenario, the plant will increase regular time production to 600 units per month for the first 3 months (January- March), then drop to 450 units for the last three months. (Note: the cost of lost sales is $25) What is the cost of the second plan? [ Select) The final plan (which includes all costs and demands mentioned so far) would be to produce 500 units per month regular time, and out-source only when necessary to avoid any lost sales. The final plan (which includes all costs and demands mentioned so far) would be to produce 500 units per month regular time, and out-source only when necessary to avoid any lost sales. What is the cost of plan 3? [Select) Based on costs, which plan should be chosen? [ Select)

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