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I need solutions for exercise 13.10, but data of exercise 13.9 ( look picture uploaded) are reuqired. The S&OP team (see Problem 13.9) is considering

I need solutions for exercise 13.10, but data of exercise 13.9 ( look picture uploaded) are reuqired.

The S&OP team (see Problem 13.9) is considering two more mixed strategies. Using the data in Problem 13.9, compare plans C and D with plans A and B and make a recommendation.

  • Plan C: Keep the current workforce steady at a level producing 1,300 units per month. Subcontract the remainder to meet demand. Assume that 300 units remaining from June are available in July.
  • Plan D: Keep the current workforce at a level capable of producing 1,300 units per month. Permit a maximum of 20% overtime at a premium of $40 per unit. Assume that warehouse limitations permit no more than a 180-unit carryover from month to month. This plan means that any time inventories reach 180, the plant is kept idle. Idle time per unit is $60. Any additional needs are subcontracted at acost of $60 per incremental unit.

image text in transcribed

... 13.9 The S&OP team at Kansas Furniture, has received the following estimates of demand requirements: July 1,000 Aug. 1,200 Sept. 1,400 Oct. 1,800 Nov. 1,800 Dec. 1,800 Stephanie Klein-Davis/The Roanoke Times/ AP Images a) Assuming one-time stockout costs for lost sales of $100 per unit, inventory carrying costs of $25 per unit per month, and zero beginning and ending inventory, evaluate these two plans on an incremental cost basis: Plan A: Produce at a steady rate (equal to minimum require- ments) of 1,000 units per month and subcontract additional units at a $60 per unit premium cost. Plan B: Vary the workforce, to produce the prior month's demand. The firm produced 1,300 units in June. The cost of hiring additional workers is $3,000 per 100 units produced. The cost of layoffs is $6,000 per 100 units cut back. Note: Both hiring and layoff costs are incurred in the month of the change, (i.e. going from production of 1,300 in July to 1,000 in August requires a layoff (and related costs) of 300 units in August, just as going from production of 1,000 in August to 1,200 in September requires hiring (and related costs) of 200 units in September). b) Which plan is best and why? ... 13.9 The S&OP team at Kansas Furniture, has received the following estimates of demand requirements: July 1,000 Aug. 1,200 Sept. 1,400 Oct. 1,800 Nov. 1,800 Dec. 1,800 Stephanie Klein-Davis/The Roanoke Times/ AP Images a) Assuming one-time stockout costs for lost sales of $100 per unit, inventory carrying costs of $25 per unit per month, and zero beginning and ending inventory, evaluate these two plans on an incremental cost basis: Plan A: Produce at a steady rate (equal to minimum require- ments) of 1,000 units per month and subcontract additional units at a $60 per unit premium cost. Plan B: Vary the workforce, to produce the prior month's demand. The firm produced 1,300 units in June. The cost of hiring additional workers is $3,000 per 100 units produced. The cost of layoffs is $6,000 per 100 units cut back. Note: Both hiring and layoff costs are incurred in the month of the change, (i.e. going from production of 1,300 in July to 1,000 in August requires a layoff (and related costs) of 300 units in August, just as going from production of 1,000 in August to 1,200 in September requires hiring (and related costs) of 200 units in September). b) Which plan is best and why

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