Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Product E is a new product and manufactured by the Alpha company itself. This product was introduced to the market in July 2020 and the

Product E is a new product and manufactured by the Alpha company itself. This product was introduced to the market in July 2020 and the feedback of the market was very positive. Mary had provided the 2020 historical sale data of product E in the attached file. She wanted Jason to determine the optimal production plan for the first 4 weeks of 2021 for product E. Some information is given here:

2020 last week's output =2,800

Beginning inventory = 0

Inventory holding cost = $40 per unit per week

Hiring employees = $40 per unit

Terminating employee = $80 per unit

Subcontracting cost =$60 per unit

Unit cost on regular time = $30 per unit

Overtime cost = $15 extra per unit

Jason's job is to develop an aggregate plan. The three initial options he wants to evaluate are:

a. Plan A: a chase strategy that hires and fires personnel as necessary to meet the forecast.

b. Plan B: a level strategy.

c. Plan C: a level strategy that produces 2,800 units per week and meets the forecast demand with inventory and subcontracting.

Which strategy Jason should choose to get the lowest expected cost?

Week of 2020 Sales of Product E
1 N/A
2 N/A
3 N/A
4 N/A
5 N/A
6 N/A
7 N/A
8 N/A
9 N/A
10 N/A
11 N/A
12 N/A
13 N/A
14 N/A
15 N/A
16 N/A
17 N/A
18 N/A
19 N/A
20 N/A
21 N/A
22 N/A
23 N/A
24 N/A
25 N/A
26 N/A
27 1544
28 1597
29 1661
30 1703
31 1746
32 1802
33 1850
34 1902
35 1950
36 2003
37 2043
38 2097
39 2160
40 2202
41 2246
42 2295
43 2349
44 2397
45 2450
46 2499
47 2550
48 2603
49 2648
50 2691
51 2754
52 2808

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

Step: 3

blur-text-image

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

Financial Accounting

Authors: Michelle L. Hanlon, Robert P. Magee, Glenn M. Pfeiffer, Thomas R. Dyckman

6th Edition

1618533118, 978-1618533111

More Books

Students also viewed these Accounting questions

Question

What are the relevant aspects of consumer behavior and product use?

Answered: 1 week ago

Question

Solve the equation. Check the solution. -8x=-16

Answered: 1 week ago