Maha industries produces a product whose anticipated demand for the six periods is 263, 256, 301, 312, 304, and 294. The firm chooses chase demand production strategy. The regular production cost is RO 12 per unit with a maximum regular production of 280 units per period. While, the overtime and subcontract costs are RO 20 and RO 25 per unit respectively. There is no limit on subcontracting however, maximum overtime production capacity is 10. Average inventory holding cost is RO 5 per unit per period. What will be the total cost of subcontracting the production? О a. 19668 O b. 0 O c. None is correct O d. 1275 е. 800

Maha industries produces a product whose anticipated demand for the six periods is 263, 256, 301, 312, 304, and 294. The firm chooses chase demand production strategy. The regular production cost is RO 12 per unit with a maximum regular production of 280 units per period. While, the overtime and subcontract costs are RO 20 and RO 25 per unit respectively. There is no limit on subcontracting however, maximum overtime production capacity is 10. Average inventory holding cost is RO 5 per unit per period. What will be the total cost of subcontracting the production? О a. 19668 O b. 0 O c. None is correct O d. 1275 е. 800

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

Section: Chapter Questions

Problem 33P: Assume the demand for a companys drug Wozac during the current year is 50,000, and assume demand...

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Maha industries produces a product whose anticipated demand for the six periods is 263, 256, 301, 312, 304, and 294. If the firm has adopted level production strategy with a constant production of 280 units per period. The regular production cost is RO 12 per unit, whereas the overtime and subcontract costs are RO 20 and RO 25 per unit respectively. There is no limit on subcontracting; however, maximum overtime production capacity is 10. Average ?inventory holding cost is RO 5 per unit per period. What is the total cost of over time production 1)500 2) 600 3)None is correct 4)20160 5)22000
Maha industries produces a product whose anticipated demand for the six periods is 63, 256, 301 312, 304and 294. If the firm has adopted level production strategy with a constant production of 280 units per period. The regular production cost is RO 12 per unit. whereas the overtime and subcontract costs are RO 20 and RO25 per unit respectively. There is no limit on subcontracting however, maximum overtime production capacity is 10. Average inventory holding cost is RO 5 per unit per period. What is the total costs including all costs incurred? 21650 b500 20160 600
Maha industries produces a product whose anticipated demand for the six periods is 263, 256,301,312 (304 and 294. The firm chooses chase demand production strategy. The regular production cost is RO 12 per unit with a maximum regular production of 280 units per period. Whilethe overtime and subcontract costs are RO 20 and RO 25 per unit respectively. There is no limit on subcontracting however, maximum overtime production capacity is 10 Average inventory holding cost is RO 5 per unit per period. How many units in total are subcontracted ?
Berry Computer is considering moving some of its operations overseas in order to reduce labor costs. In the United States, its main circuit board costs Berry $75 per unit to produce, while overseas it costs only $65 to produce. Holding costs are based on a 20 percent annual interest rate, and the demand has been a fairly steady 200 units per week. Assume that setup costs are $200 both locally and overseas. Production lead times are one month locally and six months overseas.a. Determine the average annual costs of production, holding, and setup at each location, assuming that an optimal solution is employed in each case. Based on these results only, which location is preferable?b. Determine the value of the pipeline inventory in each case. (The pipeline inventory is the inventory on order.) Does comparison of the pipeline inventories alter the conclusion reached in part (a)?c. Might considerations other than cost favor local over overseas production?
Berry Computer is considering moving some of its operations overseas in order to reduce labor costs. In the United States, its main circuit board costs Berry $75 per unitto produce, while overseas it costs only $65 to produce. Holding costs are based on a20 percent annual interest rate, and the demand has been a fairly steady 200 units perweek. Assume that setup costs are $200 both locally and overseas. Production leadtimes are one month locally and six months overseas.a. Determine the average annual costs of production, holding, and setup at each location, assuming that an optimal solution is employed in each case. Based on theseresults only, which location is preferable?
Bell Computers purchases integrated chips at $350per chip. The holding cost is $35 per unit per year, the orderingcost is $120 per order, and sales are steady, at 400 per month. Thecompany's supplier, Rich Blue Chip Manufacturing, Inc., decidesto offer price concessions in order to attract larger orders. Theprice structure is shown in the table. a) What is the optimal order quantity and the minimum annualcost for Bell Computers to order, purchase, and hold theseintegrated chips?b) Bell Computers wishes to use a 10% holding cost rather thanthe fixed $35 holding cost in (a). What is the optimal orderquantity, and what is the optimal annual cost?
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Max the Tailor is going to sell custom suits. He was able to rent a garage from his Uncle Ed for $2,000 a month, which includes utilities, and he already owns the equipment he needs. He anticipates being able to sell his suits for $500 each. The raw materials (fabric, buttons, zippers, thread, etc.) will cost an average of $75 for each suit, and he plans to spend $25 per suit to advertise them. Assuming these are all the costs and revenues, what will be Max’s monthly break-even point in units? Does this seem like a reasonable amount for him to produce and sell every month? Please show your calculations.
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