Opertion ManagementNo handwritten solution. Maitain quality and accuracy in your answer The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows:MayJanuaryFebruary2,2002,200JuneJuly1,800MarchAprilAugust1,400Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $125 per unit. Inventory holding cost is $20 per unit permonth. Ignore any idle-time costs. The plan is called plan C.Plan C: Keep a stable workforce by maintaining a constant production rate equal to the average gross requirements excluding initial inventory and allow varying inventory levels.Conduct your analysis for January through August.The average monthly demand requirement = 1775 units. (Enter your response as a whole number.)In order to arrive at the costs, first compute the ending inventory and stockout units for each month by filling in the table below (enter your responses as whole numbers).Period Month Demand ProductionDecember01JanuaryFebruary232 56784March1,4001,6001,8001,800AprilMayJuneJulyAugust1,4001,6001,8001,8002,2002,2001,8001,4001,7751,7751,7751,7751,7751,7751,7751,775EndingInventory Stockouts (Units)200

The average monthly demand is computed as shown below: Average monthly demand = Average of demands…

Answered: The president of Hill Enterprises,…

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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