The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 1,400 May 2,100 February 1,700 June 2,100 March April 1,800 1,900 July August 1,800 1,800 Her 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 $25 per unit per month. Ignore any idle-time costs. The plan is called plan A. Plan A: Vary the workforce level to execute a strategy that produces the quantity demanded in the prior month. The December demand and rate of production are both 1,600 units per month. The cost of hiring additional workers is $50 per unit. The cost of laying off workers is $75 per unit. Evaluate this plan. (Enter all responses as whole numbers.) Note: Both hiring and layoff costs are incurred in the month of the change. For example, going from 1,600 in January to 1,400 in February incurs a cost of layoff for 200 units in February. The total cost of hirings = $. (Enter your response as a whole number.) The total cost of layoffs = $. (Enter your response as a whole number.) The total inventory carrying cost = $. (Enter your response as a whole number.) The total stockout cost = $. (Enter your response as a whole number.) Period Month 0 December Demand Production 1,600 Hire (Units) 1,600 Layoff Ending Stockouts (Units) Inventory (Units) 200 1 January 1,400 1,600 2 February 1,700 1,400 3 March 1,800 1,700 4 April 1,900 1,800 5 May 2,100 1,900 6 June 2,100 2,100 7 July 1,800 2,100 August 1,800 1,800 The total cost, excluding normal time labor costs, is = $. (Enter your response as a whole number.)
The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 1,400 May 2,100 February 1,700 June 2,100 March April 1,800 1,900 July August 1,800 1,800 Her 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 $25 per unit per month. Ignore any idle-time costs. The plan is called plan A. Plan A: Vary the workforce level to execute a strategy that produces the quantity demanded in the prior month. The December demand and rate of production are both 1,600 units per month. The cost of hiring additional workers is $50 per unit. The cost of laying off workers is $75 per unit. Evaluate this plan. (Enter all responses as whole numbers.) Note: Both hiring and layoff costs are incurred in the month of the change. For example, going from 1,600 in January to 1,400 in February incurs a cost of layoff for 200 units in February. The total cost of hirings = $. (Enter your response as a whole number.) The total cost of layoffs = $. (Enter your response as a whole number.) The total inventory carrying cost = $. (Enter your response as a whole number.) The total stockout cost = $. (Enter your response as a whole number.) Period Month 0 December Demand Production 1,600 Hire (Units) 1,600 Layoff Ending Stockouts (Units) Inventory (Units) 200 1 January 1,400 1,600 2 February 1,700 1,400 3 March 1,800 1,700 4 April 1,900 1,800 5 May 2,100 1,900 6 June 2,100 2,100 7 July 1,800 2,100 August 1,800 1,800 The total cost, excluding normal time labor costs, is = $. (Enter your response as a whole number.)
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...
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