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uarter Forecast 1 1800 2 1100 3 1600 4 900 Costs/Other Data Previous quarter's output = 1300 cases Beginning inventory = 350 cases = Stock-out
uarter Forecast 1 1800 2 1100 3 1600 4 900 Costs/Other Data Previous quarter's output = 1300 cases Beginning inventory = 350 cases = Stock-out cost $110 per case Inventory holding cost $30 per case at the end of quarter Hiring employees $40 per case = Terminating employees $75 per case Subcontracting cost $60 per case = Unit cost on regular time = $30 per case Overtime cost $20 extra per case John's job is to develop an aggregate plan. The three initial options he wants to evaluate are: Plan A: a strategy that hires and fires personnel to have monthly production meet the forecast. Plan B: a level strategy, producing the average forecast by regular time production each month. Plan C: a level strategy that produces 1,200 cases per quarter and meets the forecast demand with inventory and subcontracting. a. What is the cost of plan A? [Select] b. What is the cost of plan B? [Select] c. What is the cost of plan C? [Select] d. If you are John's boss, the VP for operations, which plan do you implement? [Select]
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