Manager Chris Channing of Fabric Mills, Inc., has developed the forecast shown in the table for bolts of cloth. The figures are in hundreds of bolts. The department has a regular output capacity of 27200) bolts per month, except for the seventh month, when capacity will be 252(00) bolts. Regular output has a cost of $25 per hundred bolts. Workers can be assigned to other jobs if production is less than regular. The beginning inventory is zero bolts. Month 5 6 Total Forecast 300 250 250 310 280 275 270 1,935 1 4 7 a. Develop a chase plan that matches the forecast and compute the total cost of your plan. Overtime is $55 per hundred bolts. Regular production can be less than regular capacity. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "O" wherever required.) Answer is not complete. Period 3 4 5 6 7 Total 300 250 250 310 280 275 270 1,935 250 Forecast Output Regular Overtime Output - Forecast Cost 272 28 250 0 272 38 272 8 272 3 252 18 1,840 95 0 Regular $ 6,800 6.250 6,250 6,800 6.800 6,800 6,300 Overtime 1,540 $ 46,000 5,225 $ 0 0 6,250 2,090 8,890 440 7,240 165 6,965 990 7,290 OVO Total $ 8,340 6,250 51.225 b. Would the total cost be less with full regular production each period with no overtime, but using a subcontractor to handle the excess above regular capacity at a cost of $45 per hundred bolts? Backlogs are not allowed. The inventory carrying cost is $4 per hundred bolts. (Round your Average inventory values to 1 decimal place. Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.) Answer is not complete. Period 5 6 7 Total 300 250 250 310 280 275 270 1,935 270 X 270 X 270 X 270 X 30 X 270 X 40 X 270 X 10 % 270 X 0 x 1,890 X 80 X Forecast Output Regular Subcontracting Inventory Beginning Ending Average Cost 0 40 X 0 0 20 X 40 % 30.0 X 40 X 40 x 20 X 10.0 X 40 X 40 X 35 X 37.5 X 35 X 35 X 35.0 X 0.0 40.0 % 40.0 X Regular $ 6,750 X 6,750 X 6,750 % 6,750 X 6,750 X 6,750 X 6,750 X 47.250 3,600 X 1,350 X 0 0 1.800 X 450 X 0X 0 X Subcontracting Inventory 0 80 x X 160 X 160 X 140 X 140 X 840 Total $ 8,100 X 6,830 > 6,910 X 8,710 X 7,360 X 6,890 % 6.890 % 51,690 Manager Chris Channing of Fabric Mills, Inc., has developed the forecast shown in the table for bolts of cloth. The figures are in hundreds of bolts. The department has a regular output capacity of 27200) bolts per month, except for the seventh month, when capacity will be 252(00) bolts. Regular output has a cost of $25 per hundred bolts. Workers can be assigned to other jobs if production is less than regular. The beginning inventory is zero bolts. Month 5 6 Total Forecast 300 250 250 310 280 275 270 1,935 1 4 7 a. Develop a chase plan that matches the forecast and compute the total cost of your plan. Overtime is $55 per hundred bolts. Regular production can be less than regular capacity. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "O" wherever required.) Answer is not complete. Period 3 4 5 6 7 Total 300 250 250 310 280 275 270 1,935 250 Forecast Output Regular Overtime Output - Forecast Cost 272 28 250 0 272 38 272 8 272 3 252 18 1,840 95 0 Regular $ 6,800 6.250 6,250 6,800 6.800 6,800 6,300 Overtime 1,540 $ 46,000 5,225 $ 0 0 6,250 2,090 8,890 440 7,240 165 6,965 990 7,290 OVO Total $ 8,340 6,250 51.225 b. Would the total cost be less with full regular production each period with no overtime, but using a subcontractor to handle the excess above regular capacity at a cost of $45 per hundred bolts? Backlogs are not allowed. The inventory carrying cost is $4 per hundred bolts. (Round your Average inventory values to 1 decimal place. Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required.) Answer is not complete. Period 5 6 7 Total 300 250 250 310 280 275 270 1,935 270 X 270 X 270 X 270 X 30 X 270 X 40 X 270 X 10 % 270 X 0 x 1,890 X 80 X Forecast Output Regular Subcontracting Inventory Beginning Ending Average Cost 0 40 X 0 0 20 X 40 % 30.0 X 40 X 40 x 20 X 10.0 X 40 X 40 X 35 X 37.5 X 35 X 35 X 35.0 X 0.0 40.0 % 40.0 X Regular $ 6,750 X 6,750 X 6,750 % 6,750 X 6,750 X 6,750 X 6,750 X 47.250 3,600 X 1,350 X 0 0 1.800 X 450 X 0X 0 X Subcontracting Inventory 0 80 x X 160 X 160 X 140 X 140 X 840 Total $ 8,100 X 6,830 > 6,910 X 8,710 X 7,360 X 6,890 % 6.890 % 51,690
