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January 1,200 May 2, 100 February 1,500 June 2,300 March 1,600 July 1,700 April 1,900 August 1,300 Her operations manager is considering a new plan,
January 1,200 May 2, 100 February 1,500 June 2,300 March 1,600 July 1,700 April 1,900 August 1,300 Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $100 per unit. Inventory holding cost is $25 per unit per month. Ignore any idle-time costs. The plan is called plan C. Plan C: Keep a stable workforce by maintaining a constant production rate equal to the average gross requirements excluding initial inventory and allow varying inventory levels. Conduct your analysis for January through August. The average monthly demand requirement = 1700 units. (Enter your response as a whole number.) In order to arrive at the costs, first compute the ending inventory and stockout units for each month by filling in the table below (enter your responses as whole numbers). Ending Stockouts Period Month Demand Production Inventory (Units) December 200 January 1,200 1,700 2 February 1,500 1,700 3 March 1,600 1,700 4 April 1,900 1,700 5 May 2,100 1,700 6 June 2,300 1,700 7 July 1,700 1,700 8 August 1,300 1,700 The total stockout cost = The total inventory carrying cost = The total cost, excluding normal time labour costs, is
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