Question
Quarter Lawn Mowers Snow Blowers Q - I 10,000 9,000 Q - II 15,000 7,000 Q - III 16,000 19,000 Q - IV 3,000 10,000
Quarter Lawn Mowers Snow Blowers Q - I 10,000 9,000 Q - II 15,000 7,000 Q - III 16,000 19,000 Q - IV 3,000 10,000 Quarter - I Beginning Inventory: Mowers 600; blowers 400 Output and Costs: Regular Time $5.00 per unit Overtime $7.50 per unit Subcontract $10.00 per unit Part Time $12.00 per unit Inventory $4.00 per unit per quarter based on avg. inventory during each quarter Backorders $8.00 per unit per period (based on backorders at end of period) Hiring $100.00 per employee (Full-Time or Part-Time) Layoff $500.00 per employee (no cost if Part-Time) Production Rates: Regular 500 units per Full-Time employee per quarter (of either unit) Overtime up to 200 units per Full-Time employee per quarter (of either unit) Part Time 400 units per Part Time employee per quarter (of either unit) Production work force: As of the first of the year, the production work force consists of 44 Full-Time employees. Additional Assumptions: 1) Part Time employees may not work overtime 2) Assume 100% utilization of Full-Time employees on regular time and of Part Time employees at all times (i.e., all such employees on the payroll during a period produce at the rates shown under Production Rates). 3) Overtime utilization of Full-Time employees can be on an as needed basis subject to the limitation on maximum overtime output shown under Production Rates.
3. The V.P of Marketing is not all that happy with the large volume of backorders in your plan from question 1A . She asks that you develop a plan that requires no backorders at any time during the year. The V.P. of manufacturing says that he will insist that any such plan specify level output each quarter. The V.P. of Finance states that you no longer need to have a Qtr. IV ending inventory of zero but it should be as low as possible. Use the original demand data, beginning inventory, etc. from problem 1. Develop a plan that will meet the requirements of all three V.P.'s.
Step 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