Question
The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 1,400 February 1,500 March
The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 1,400 February 1,500 March 1,700 April 1,700 May 2,100 June 2,100 July 1,800 August 1,800
Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $125 per unit. Inventory holding cost is $25 per unit per month. Ignore any idle-time costs. The plan is called plan A.
Plan A: Vary the workforce level to execute a strategy that produces the quantity demanded in the prior month. The December demand and rate of production are both 1,600 units per month. The cost of hiring additional workers is $50 per unit. The cost of laying off workers is $80 per unit. Evaluate this plan. (Enter all responses as whole numbers.)
Note: Both hiring and layoff costs are incurred in the month of the change. For example, going from 1,600 in January to 1,400 in February incurs a cost of layoff for 200 units in February.
A.) Fill in the table below. (Enter your responses as whole numbers.)
Period | Month | Demand | Production | Hire(Units) | Layoffs(Units) | Ending Inventory(Not Including Dec) | Stockouts (units) |
0 | Dec | 1600 | 1600 | 200 | |||
1 | Jan | 1400 | 1600 | ||||
2 | Feb | 1500 | 1400 | ||||
3 | March | 1700 | 1500 | ||||
4 | April | 1700 | 1700 | ||||
5 | May | 2100 | 1700 | ||||
6 | June | 2100 | 2100 | ||||
7 | July | 1800 | 2100 | ||||
8 | Aug | 1800 | 1800 | ||||
Total | ? | ? | ? | ? |
B.)Total hiring cost =? (Enter your response as a whole number)
C.)The total cost of layoffs =? (Enter your response as a whole number)
D.)The total inventory carrying cost = ? (Enter your response as a whole number)
E.) The total stockout cost =? (Enter your response as a whole number.)
F.)The total cost, excluding normal time labor costs, is = ?(Enter your response as a whole number.)
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