Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the production planner, has assembled the following cost data and demand forecast :
demand forecast.
Quarter
|
Forecast
|
1
|
1,900
|
2
|
1,200
|
3
|
1,600
|
4
|
800
|
Costs/Other Data
|
Previous quarter's
output=1,200 cases
|
Beginning
inventory=0 cases
|
Stockout cost of
backorders=$160 per case
|
Inventory holding
cost=$40
per case at end of quarter |
Hiring
employees=$35 per case
|
Terminating
employees=$80 per case
|
Subcontracting
cost=$65 per case
|
Unit cost on regular
time=$30 per case
|
Overtime
cost=$20 extra per case
|
Capacity on regular
time=1,900 cases per quarter
|
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 as necessary to meet the forecast.•
Plan
B:
a level strategy.•
Plan
C:
a level strategy that produces
1,100
cases per quarter and meets the forecast demand with inventory and subcontracting.Part 2
a) Which strategy is the lowest-cost plan?
Try hiring and layoffs (to meet the forecast) as necessary (enter your responses as whole numbers).
Hiring and Layoff Plan
|
||||
Quarter
|
Forecast
|
Production
|
Hire
(Units)
|
Layoff
(Units)
|
|
|
1,200
|
|
|
1
|
1,900
|
enter your response here
|
enter your response here
|
enter your response here
|
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Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question
Construct a plan that holds employment steady (level strategy) by producing the average forecast for all four quarters (enter your responses as whole numbers).
Level Plan
|
||||||
Quarter
|
Forecast
|
Production
|
Ending Inventory
|
Shortage
|
Hire
(Units)
|
Layoff
(Units)
|
|
|
1,200
|
|
|
|
|
1
|
1,900
|
enter your response here
|
enter your response here
|
enter your response here
|
enter your response here
|
enter your response here
|
Solution
by Bartleby Expert
Follow-up Question
The total cost, including normal time labor costs, for this hiring and layoffs plan is
$enter your response here
(enter your response as a whole number).
Solution
by Bartleby Expert
Follow-up Question
The total cost, including normal time labor costs, for this hiring and layoffs plan is
$ enter your response here
(enter your response as a whole number).Solution
by Bartleby Expert
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question
Construct a plan that holds employment steady (level strategy) by producing the average forecast for all four quarters (enter your responses as whole numbers).
Level Plan
|
||||||
Quarter
|
Forecast
|
Production
|
Ending Inventory
|
Shortage
|
Hire
(Units)
|
Layoff
(Units)
|
|
|
1,200
|
|
|
|
|
1
|
1,900
|
enter your response here
|
enter your response here
|
enter your response here
|
enter your response here
|
enter your response here
|
Solution
by Bartleby Expert
Follow-up Question
The total cost, including normal time labor costs, for this hiring and layoffs plan is
$enter your response here
(enter your response as a whole number).
Solution
by Bartleby Expert
Follow-up Question
The total cost, including normal time labor costs, for this hiring and layoffs plan is
$ enter your response here
(enter your response as a whole number).Solution
by Bartleby Expert
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