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Leo's AP Case Information. Assume your team is advising the Operations Manager at Leo's. Review the following info from Leo's Confectionery and address the questions
Leo's AP Case Information. Assume your team is advising the Operations Manager at Leo's. Review the following info from Leo's Confectionery and address the questions following the case. Your deliverable is a memo directed to the Operations Manager at Leo's. Leo's Confectionery has recently experienced explosive demand growth for the Leo's product line. The Marketing/Sales department has provided the following demand forecast for the upcoming 6 months. Leo's is considering three AP strategies to meet the forecasted demand over the six month planning horizon. The monthly demand forecast is below: Month Monthly Demand Production days 1 15,000 22 2 16,200 23 3 17,500 22 4 18,500 22 5 19,500 23 6 20,500 22 Cost and Production Info: Inventory Carrying Cost-per unit/month $ 0.50 Regular Pay/hour--8 hours daily $18.00 Regular hours/day/employee 8 Contract Manufacturing--cost/hour $30.00 Employee and Contract Manufacturing Productivity--units/hour 20 Leo's has no beginning inventory for the first month of the planning horizon
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