Question
Please help me with this question. Thank you very much! Trexoid Inc. makes a popular video game console. Demand varies each month, with highest demand
Please help me with this question. Thank you very much!
Trexoid Inc. makes a popular video game console. Demand varies each month, with highest demand coming in the last quarter of the year. Regular production costs are $120 per unit and inventory carrying cost is $5 per unit per quarter. Overtime production cost is $150 per unit. Assume that the 10 current Trexoid employees can produce a total of 50,000 units per quarter in regular production and can work enough overtime hours to produce the amount required if a chase plan is employed. On the other hand, hiring cost is $5,000 per employee and firing cost is $10,000 per employee. Trexoid currently has zero inventory on hand, and they would like to have zero inventories at the end of the year. Assume hiring and layoff/firing, if necessary, occur at the beginning of the quarter. Forecast demand is as follows:
Trexoid Inc. makes a popular video game console. Demand varies each month, with highest demand coming in the last quarter of the year. Regular production costs are $120 per unit and inventory carrying cost is $5 per unit per quarter. Overtime production cost is $150 per unit. Assume that the 10 current Trexoid employees can produce a total of 50,000 units per quarter in regular production and can work enough overtime hours to produce the amount required if a chase plan is employed. On the other hand, hiring cost is $5,000 per employee and firing cost is $10,000 per employee. Trexoid currently has zero inventory on hand, and they would like to have zero inventories at the end of the year. Assume hiring and layoff/firing, if necessary, occur at the beginning of the quarter. Forecast demand is as follows: 2pictureClick here for the Excel Data File a. Given the above demand estimate, develop a production plan based on level production. (Leave no cells blank - be certain to enter "O" wherever required.) b. Determine the cost of the level production plan. c. Given the planning information, develop a production plan based on chase production. (Leave no cells blank - be certain to enter "O" wherever required.) d. Determine the cost of the chase production planStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started