A company believes that its demand for the next six months is as follows: Month 1 2 3 4 5 6 Total Demand 6,500 5,000 7,000 5,000 8,500 10,000 42,000 The output per worker per month is 125 units. The per worker hiring and lay off costs are $1,500 and $3,000, respectively. There is no beginning inventory, and the starting workforce is 75. It cost the company $20 to carry an item in inventory each month, and the stockout costs is estimated to be $75 per unit. Develop a level sales and operations plan for this firm. Develop the monthly production schedule and show the labor workforce and inventory levels. Finally, compute the cost of the plan.

Name: A company believes that its demand for the next six months is as foll
Uploaded: 2024-03-20T06:33:06.000Z
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Description: A company believes that its demand for the next six months is as follows:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A company believes that its demand for the next six months is as follows:

Month	1	2	3	4	5	6	Total
Demand	6,500	5,000	7,000	5,000	8,500	10,000	42,000

The output per worker per month is

125

units. The per worker hiring and lay off costs are $1,500 and $3,000, respectively. There is no beginning inventory, and the starting workforce is 75. It cost the company $20 to carry an item in inventory each month, and the stockout costs is estimated to be $75 per unit. Develop a level sales and operations plan for this firm. Develop the monthly production schedule and show the labor workforce and inventory levels. Finally, compute the cost of the plan.

Construct the production table. Note that a negative beginning inventory denotes a stockout that is carried forward (enter your responses as whole numbers).

Month	Demand	Beginning Inventory	Production	Ending Inventory	Stockouts
1	6,500

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