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The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 1 , 4 5
The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next months as follows:
January
May
February
June
March
July
April
August
Her operations manager is considering a new plan, which begins in January with units of inventory on hand. Stockout cost of lost sales is $ per unit. Inventory holding cost is $ per unit per month. Ignore any idletime costs. Evaluate the following plans D and E
Part
Plan D: Keep the current workforce stable at producing units per month. In addition to the regular production, another of the normal production units can be produced in overtime at an additional cost of $ per unit. A warehouse now constrains the maximum allowable inventory on hand to units or less.
Note: Do not produce in overtime if production or inventory are adequate to cover demand.
Part
Plan D
Month
Demand
Production
Units
OT ProductionUnits
Ending Inventory
StockoutsUnits
December
January
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February
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March
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April
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May
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June
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July
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August
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