QUARTER FORECAST 1,800 1,100 1,600 2 olo 3 4 1ms 900 COSTS/OTHER DATA Previous quarter's output = 1,300 cases m ode la %3D Beginning inventory = 0 cases Stockout cost = $150 per case Sow Inventory holding cost = $40 per case at end of quarter t Hiring employees = $40 per case Terminating emplloyees = $80 per case Subcontracting cost = $60 per case Unit cost on regular time = $30 per case Overtime cost = $15 extra per case Capacity on regular time = 1,800 cases per quarter
QUARTER FORECAST 1,800 1,100 1,600 2 olo 3 4 1ms 900 COSTS/OTHER DATA Previous quarter's output = 1,300 cases m ode la %3D Beginning inventory = 0 cases Stockout cost = $150 per case Sow Inventory holding cost = $40 per case at end of quarter t Hiring employees = $40 per case Terminating emplloyees = $80 per case Subcontracting cost = $60 per case Unit cost on regular time = $30 per case Overtime cost = $15 extra per case Capacity on regular time = 1,800 cases per quarter
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
Related questions
Question
| Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mitten thai, the production planner, has assembled the fo llowing cost data and demand options he wants to evaluate are: • Plan A: a strategy that hires and fires personnel as necessary to meet the forecast. • Plan B: a level strategy. • Plan C: a level strategy that produces 1,200 cases per quarter and meets the fo recast demand with inventory and subcontracting. a) Which strategy is the lowest-cost plan? b) If you are John's boss, the VP for operations, which p lan do you implement and why? |
Transcribed Image Text:QUARTER
FORECAST
1,800
1,100
1,600
2
olo 3
4
1ms 900
COSTS/OTHER DATA
Previous quarter's output = 1,300 cases m ode la
%3D
Beginning inventory = 0 cases
Stockout cost = $150 per case
Sow
Inventory holding cost = $40 per case at end of quarter t
Hiring employees = $40 per case
Terminating emplloyees = $80 per case
Subcontracting cost = $60 per case
Unit cost on regular time = $30 per case
Overtime cost = $15 extra per case
Capacity on regular time = 1,800 cases per quarter
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 6 images
Recommended textbooks for you
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Practical Management Science
Operations Management
ISBN:
9781337406659
Author:
WINSTON, Wayne L.
Publisher:
Cengage,
Operations Management
Operations Management
ISBN:
9781259667473
Author:
William J Stevenson
Publisher:
McGraw-Hill Education
Operations and Supply Chain Management (Mcgraw-hi…
Operations Management
ISBN:
9781259666100
Author:
F. Robert Jacobs, Richard B Chase
Publisher:
McGraw-Hill Education
Purchasing and Supply Chain Management
Operations Management
ISBN:
9781285869681
Author:
Robert M. Monczka, Robert B. Handfield, Larry C. Giunipero, James L. Patterson
Publisher:
Cengage Learning
Production and Operations Analysis, Seventh Editi…
Operations Management
ISBN:
9781478623069
Author:
Steven Nahmias, Tava Lennon Olsen
Publisher:
Waveland Press, Inc.