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 February March April 1,200

image text in transcribedimage 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 February March April 1,200 1,500 1,600 1,900 May June July August 2,100 2,300 1,700 1,300 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 $20 per unit per month. Ignore any idle-time costs. The plan is called plan C. Plan C: Keep a stable workforce by maintaining a constant production rate equal to the average gross requirements excluding initial inventory and allow varying inventory levels. Conduct your analysis for January through August. The average monthly demand requirement = units. (Enter your response as a whole number.) In order to arrive at the costs, first compute the ending inventory and stockout units for each month by filling in the table below (enter your responses as whole numbers). Period Month 0 December 1 January 2 February 3 March Ending Demand Production Inventory Stockouts (Units) 200 1,400 1,775 1,600 1,775 1,800 1,775 1,800 1,775 2,200 1,775 2,200 1,775 1,800 1,775 4 April May ODD 6 7 8 June July August 1.400 1,775 The total stockout cost = $ . (Enter your response as a whole number.) The total inventory carrying cost = $ (Enter your response as a whole number.) The total cost, excluding normal time labor costs, is = $ . (Enter your response as a whole number.)

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

More Books

Students also viewed these Accounting questions