Question
Jupiter, a large candy company, is having great success with its Swan family of candy bars. Due to a number of factors they like to
Jupiter, a large candy company, is having great success with its "Swan" family of candy bars. Due to a number of factors they like to plan their production at least nine months into the future. The table below contains their demand projections (in tons) for April through December:
Supply/Demand Info | Beginning | Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec |
Predicted sales | 3,000 | 2,200 | 1,900 | 2,000 | 2,400 | 3,200 | 4,800 | 2,700 | 3,600 | |
Regular production | ||||||||||
Overtime production | ||||||||||
Subcontract production | ||||||||||
Ending inventory | 600 | |||||||||
Hired employees | ||||||||||
Fired employees | ||||||||||
Total employees | 80 |
Cost variables are as follows:
Cost Variables | |
Labor cost/hour | $14 |
Overtime cost/ton | $66 |
Subcontracting cost/ton | $75 |
Holding cost/ton/month | $9 |
Hiring cost/employee | $1,200 |
Firing cost/employee | $1,500 |
Here is some additional relevant (capacity) information:
Capacity Information | |
Total labor hours/ton | 4 |
Regular production tons/employee/month | 25 |
Max regular production/tons/month | 3,000 |
Max overtime production/tons/month | 1,500 |
Max subcontractor production/tons/month | 2,000 |
Given the above information (and don't overlook beginning number of employees and inventory levels in the first table), create a level production plan with only the use of regular production and no inventory left over at the end of the six-month period.
What is the regular production cost (over the six months from January through June) for a level production plan?
What is the total overtime production cost for this production plan?
What is the total subcontract cost for this production plan?
What is the total holding cost for this production plan?
What is the total hire cost for this production plan?
What is the total fire cost for this production plan?
What is the total cost (sum of all costs) for this production plan?
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