Hill is now considering plan C: Keep a stable workforceby maintaining a constant production ra te equal to the averagerequirements and allow varying in ventory levels. Beginning inventory,stockout costs, and holding costs are provided.Plot the demand with a graph that also shows average requirements.Conduct your analysis for January through August.

Hill is now considering plan C: Keep a stable workforceby maintaining a constant production ra te equal to the averagerequirements and allow varying in ventory levels. Beginning inventory,stockout costs, and holding costs are provided.Plot the demand with a graph that also shows average requirements.Conduct your analysis for January through August.

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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The president of HiU Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 monthsas follows: Her operat ions manager is considering a new pla n, whichbegins in January with 200 uni ts on hand . Stockout cost of lostsales is SlOO per unit. Inventory holding cost is $20 per unit permonth. Ignore any idle-time costs. The plan is called plan A.Plan A: Vary the workforce level to execute a strategy that producesthe quantity demanded in the prior month. The Decemberdemand and rate of production are both I ,600 units per month. Thecost of hiring additional workers is $5,000 per I 00 uruts. The cost oflaying oiTworkers is $7,500 per 100 units. Evaluate this plan.
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