Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 1,200 May 2,200 February

image text in transcribed
The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 1,200 May 2,200 February 1,700 June 2, 100 March 1,700 July 1,900 April 1,800 August 1,300 Her operations manager is considering a new plan, which begins in January with 200 units on hand and ends with zero inventory. Stockout cost of lost sales is $125 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-time costs. The plan is called plan B. Plan B: Produce at a constant rate of 1,200 units per month, which will meet minimum demands. Then use subcontracting, with additional units at a premium price of $75 per unit. Subcontracting capacity is limited to 1,000 units per month. Evaluate this plan by computing the costs for January through August In order to arrive at the costs, first compute the ending inventory and subcontracting units for each month by filling in the table below (enter your responses as whole numbers). Ending Subcontract Period Month Demand Production Inventory Units 0 December 200 January 1,200 1,200 2 February 1,700 1,200 3 March 1,700 1,200 4 April 1,800 1,200 5 May 2,200 1,200 6 June 2,100 1,200 7 July 1,900 1,200 8 August 1,300 1,200

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

A First Course In Discrete Mathematics

Authors: John C Molluzzo, Fred Buckley

1st Edition

1478634383, 9781478634386

More Books

Students also viewed these Mathematics questions

Question

genuises abd invoation themes in ender game

Answered: 1 week ago

Question

Engage everyone in the dialogue

Answered: 1 week ago