Question
Kosar Manufacturing has collected the following information on one of its major products. Most efficient production rate = 2,200 + X units per period Production
Kosar Manufacturing has collected the following information on one of its major products.
Most efficient production rate = 2,200 + X units per period
Production change costs = $30 per unit of change (from the most efficient production rate = 2,100 + X units/period)
Inventory costs = $7 per unit per period (on closing inventory balance)
Backorder costs = $15 per unit to carry demand into next period
X= 32
Period | Demand (units) |
1 | 3,000 + X |
2 | 2,300 |
3 | 1,800 + X |
4 | 2,800 |
5 | 2,000 + X |
6 | 2,300 |
Beginning inventory = X*20 units
Calculate a level production schedule that yields X inventory at the end of period 6.
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| Total | Ending | Regular | Extra |
Quarter | Demand | Production | Inventory | Production | Production |
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3 |
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4 |
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5 |
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6 |
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What is the total cost of this solution? What is the total inventory cost of this solution? (25 points)
Extra production | Inventory | Backorder | ||
Costs |
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Total cost |
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