NUMBER 3 PLEASE
Rowley Apparel, manufacturer of the famous "Race-A-Rama" swimwear line, needs help planning production for next year. Demand for swimwear follows a seasonal pattern, as shown here. Given the following costs and demand forecasts, test these three strategies for meeting demand: (a) level production with overtime and subcontracting, (b) level production with backorders as needed. (c) chase demand. Determine the cost of each strategy. Which strategy would you recommend? Month January February March April May June July | August September October November December Demand Forecast 1,000 500 500 2,000 3,000 4.000 5,000 3,000 1,000 500 500 3,000 Beginning workforce Subcontracting capacity Overtime capacity Production rate per worker Regular wage rate Overtime wage rate Subcontracting cost Hiring cost Firing cost Holding cost Backordering cost No beginning inventory 8 workers Unlimited 2,000 units/month 250 units/month $15 per unit $25 per unit $30 per unit $100 per worker $200 per worker $0.50 per unit/ $10 per unit/month Ans. (a) $448,000 (b) $443,250 (c) $367,600. Choose (c). 3. In Problem 1 suppose the demand for Race-A-Rama swimwear has increased 2,000 units per month. Consider these three strategies: (a) constant production at 3,000 units with overtime and PSS.Docx subcontracting, (b) constant production at 4,000 units with backorders, and (c) chase demand. Which strategy would you recommend? Use the original costs stated in question 1. Modify the spreadsheet model you set up for question 1 above by entering the new demands and modifying your strategy formulas appropriately. Ans.(a) $856,500 (b) $803,250 (c) $727,200. Choose (c). Rowley Apparel, manufacturer of the famous "Race-A-Rama" swimwear line, needs help planning production for next year. Demand for swimwear follows a seasonal pattern, as shown here. Given the following costs and demand forecasts, test these three strategies for meeting demand: (a) level production with overtime and subcontracting, (b) level production with backorders as needed. (c) chase demand. Determine the cost of each strategy. Which strategy would you recommend? Month January February March April May June July | August September October November December Demand Forecast 1,000 500 500 2,000 3,000 4.000 5,000 3,000 1,000 500 500 3,000 Beginning workforce Subcontracting capacity Overtime capacity Production rate per worker Regular wage rate Overtime wage rate Subcontracting cost Hiring cost Firing cost Holding cost Backordering cost No beginning inventory 8 workers Unlimited 2,000 units/month 250 units/month $15 per unit $25 per unit $30 per unit $100 per worker $200 per worker $0.50 per unit/ $10 per unit/month Ans. (a) $448,000 (b) $443,250 (c) $367,600. Choose (c). 3. In Problem 1 suppose the demand for Race-A-Rama swimwear has increased 2,000 units per month. Consider these three strategies: (a) constant production at 3,000 units with overtime and PSS.Docx subcontracting, (b) constant production at 4,000 units with backorders, and (c) chase demand. Which strategy would you recommend? Use the original costs stated in question 1. Modify the spreadsheet model you set up for question 1 above by entering the new demands and modifying your strategy formulas appropriately. Ans.(a) $856,500 (b) $803,250 (c) $727,200. Choose (c)
