Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pleaase put call the calculations on excel sheet. The Union Street Microbrewery makes Monon Mild beer, which it bottles and then sells in its adjoining

Pleaase put call the calculations on excel sheet.

The Union Street Microbrewery makes Monon Mild beer, which it bottles and then sells in its adjoining restaurant. It costs $750 to set up to brew a batch of beer. The unit cost of brewing and bottling is $1.75 per bottle. It takes one month to brew, ferment and bottle the batch of beer before it is ready to be consumed. A bottle of Monon Mild sells for $5. The monthly cost to store the beer in inventory is $0.20 per bottle. This cost is incurred for the monthly ending inventory of ready-to-sell beer (after demand has been met). The shelf life of the beer is long enough that storage time is not a concern. The average monthly demand for beer is 2000 bottles, but it varies by a seasonal factor depending on the month as shown below. So, for example, the demand for February is 2000*.81 = 1620 bottles. Jan 0.78 Feb 0.81 Mar 0.85 Apr 1.03 May 1.11 Jun 1.2 Jul 1.22 Aug 1.3 Sep 1 Oct 0.96 Nov 0.94 Dec 0.8 At present, they start a new batch of Monon Mild when the end of the prior month inventory reaches 1000 bottles. (e.g. If they have 800 bottles left at the end of month 2, setup happens at the end of month 2, production happens throughout month 3 and the beer is ready for consumption at the start of month 4.) The brewery has the capacity to produce 3000 bottles per month. When a batch is made, they currently produce at full capacity. Any demand that cannot be met is lost. a) Develop a model that represents this scenario over a 12 month, January to December, period. The ending inventory in the month prior to January was 1800 bottles. (Note that no batch would be in process according to their present policy, but with a different policy, there could be. The setup cost for that batch would not be included in this 12 month time frame, although the production and holding costs would be.) For the year, report the total profit, the number of production runs, the maximum inventory level and the number of months in which a stockout occurred.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing And Assurance Services

Authors: David Ricchiute

7th Edition

0324117760, 978-0324117769

More Books

Students also viewed these Accounting questions

Question

Define Management by exception

Answered: 1 week ago

Question

Explain the importance of staffing in business organisations

Answered: 1 week ago

Question

What are the types of forms of communication ?

Answered: 1 week ago

Question

Is SHRD compatible with individual career aspirations

Answered: 1 week ago