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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 February March April 1,500

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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 February March April 1,500 1,700 1,800 1,700 May June July August 2,200 2,200 1,700 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 $100 per unit. Inventory holding cost is $25 per unit per month. Ignore any idle-time costs. The plan is called plan B Plan B: Produce at a constant rate of 1,300 units per month, which will meet minimum demands. Then use subcontracting, with additional units at a premium price of S80 per unit Subcontracting capacity is limited to 900 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 Invento Units 0 December 1 January 2 February 3 March 4 April 5 May 6 June 7 July 8 August 200 1,500 1,700 1,800 1,700 2,200 2,200 1,700 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300 1,300

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