Question
The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 1 comma 400 1,400
The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 1 comma 400 1,400 May 2 comma 300 2,300 February 1 comma 600 1,600 June 2 comma 100 2,100 March 1 comma 700 1,700 July 1 comma 900 1,900 April 1 comma 800 1,800 August 1 comma 900 1,900 Her operations manager is considering a new plan, which begins in January with 200 200 units of inventory on hand. Stockout cost of lost sales is $ 125 125 per unit. Inventory holding cost is $ 25 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 comma 600 1,600 units per month. The cost of hiring additional workers is $ 55 55 per unit. The cost of laying off workers is $ 80 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 comma 600 1,600 in January to 1 comma 400 1,400 in February incurs a cost of layoff for 200 200 units in February. Period Month Demand Production Hire (Units) Layoff (Units) Ending Inventory Stockouts (Units) 0 December 1 comma 600 1,600 1 comma 600 1,600 200 200 1 January 1 comma 400 1,400 1 comma 600 1,600 nothing nothing nothing nothing 2 February 1 comma 600 1,600 1 comma 400 1,400 nothing nothing nothing nothing 3 March 1 comma 700 1,700 1 comma 600 1,600 nothing nothing nothing nothing 4 April 1 comma 800 1,800 1 comma 700 1,700 nothing nothing nothing nothing 5 May 2 comma 300 2,300 1 comma 800 1,800 nothing nothing nothing nothing 6 June 2 comma 100 2,100 2 comma 300 2,300 nothing nothing nothing nothing 7 July 1 comma 900 1,900 2 comma 100 2,100 nothing nothing nothing nothing 8 August 1 comma 900 1,900 1 comma 900 1,900 nothing nothing nothing nothing
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