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A new start-up company is conducting a SOP meeting in order to "plan ahead" to effectively address the seasonal variation appearing in the annual demand of its products. Pedro, the planning manager is considering to use a planning horizon of 6 months and utilize the following information: Demand Forecast No. of Working Days Month January 1,800 22 February 1,500 19 March 1,100 21 April 900 21 May 1,100 22 June 1,600 20 Cost Breakdown Cost (Php) Material 100 per unit Inventory Holding 5 per unit per month Marginal Stock-out 10 per unit per month Marginal Cost of Subcontracting* Hiring and Training 20 per unit 1,000 per worker Layoff 1,500 per worker Regular Labor Cost per Hour 15 per worker per hour 20 per worker per hour Overtime Labor Cost per Hour *Cost of buying less material costs Starting and Operating Conditions Current Inventory 400 units 38 workers Current Workforce Labor Hours per Unit 5 worker-hours/ unit Regular Labor Time per Employee per Day 8 hours Inventory at the End of Each Month 25% of corresponding demand a. Compute the production net requirements b. Determine the production cost of producing exactly the quantities required for each period through regular labor by varying the workforce. Use the table below for your final solution/answer. Cost Item

A new start-up company is conducting a SOP meeting in order to "plan ahead" to effectively address the seasonal variation appearing in the annual demand of its products. Pedro, the planning manager is considering to use a planning horizon of 6 months and utilize the following information: Demand Forecast No. of Working Days Month January 1,800 22 February 1,500 19 March 1,100 21 April 900 21 May 1,100 22 June 1,600 20 Cost Breakdown Cost (Php) Material 100 per unit Inventory Holding 5 per unit per month Marginal Stock-out 10 per unit per month Marginal Cost of Subcontracting* Hiring and Training 20 per unit 1,000 per worker Layoff 1,500 per worker Regular Labor Cost per Hour 15 per worker per hour 20 per worker per hour Overtime Labor Cost per Hour *Cost of buying less material costs Starting and Operating Conditions Current Inventory 400 units 38 workers Current Workforce Labor Hours per Unit 5 worker-hours/ unit Regular Labor Time per Employee per Day 8 hours Inventory at the End of Each Month 25% of corresponding demand a. Compute the production net requirements b. Determine the production cost of producing exactly the quantities required for each period through regular labor by varying the workforce. Use the table below for your final solution/answer. Cost Item

Practical Management Science
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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A new start-up company is conducting a SOP meeting in order to "plan ahead" to effectively address the seasonal variation appearing in the annual demand of its products. Pedro, the planning manager is considering to use a planning horizon of 6 months and utilize the following information: Demand Forecast No. of Working Days Month January 1,800 22 February 1,500 19 March 1,100 21 April 900 21 May 1,100 22 June 1,600 20 Cost Breakdown Cost (Php) Material 100 per unit Inventory Holding 5 per unit per month Marginal Stock-out 10 per unit per month Marginal Cost of Subcontracting* 20 per unit 1,000 per worker Hiring and Training Layoff 1,500 per worker Regular Labor Cost per Hour Overtime Labor Cost per Hour *Cost of buying less material costs 15 per worker per hour 20 per worker per hour Starting and Operating Conditions Current Inventory 400 units Current Workforce 38 workers Labor Hours per Unit 5 worker-hours / unit Regular Labor Time per Employee per Day 8 hours Inventory at the End of Each Month 25% of corresponding demand a. Compute the production net requirements b. Determine the production cost of producing exactly the quantities required for each period through regular labor by varying the workforce. Use the table below for your final solution/answer. Cost Item
Transcribed Image Text:A new start-up company is conducting a SOP meeting in order to "plan ahead" to effectively address the seasonal variation appearing in the annual demand of its products. Pedro, the planning manager is considering to use a planning horizon of 6 months and utilize the following information: Demand Forecast No. of Working Days Month January 1,800 22 February 1,500 19 March 1,100 21 April 900 21 May 1,100 22 June 1,600 20 Cost Breakdown Cost (Php) Material 100 per unit Inventory Holding 5 per unit per month Marginal Stock-out 10 per unit per month Marginal Cost of Subcontracting* 20 per unit 1,000 per worker Hiring and Training Layoff 1,500 per worker Regular Labor Cost per Hour Overtime Labor Cost per Hour *Cost of buying less material costs 15 per worker per hour 20 per worker per hour Starting and Operating Conditions Current Inventory 400 units Current Workforce 38 workers Labor Hours per Unit 5 worker-hours / unit Regular Labor Time per Employee per Day 8 hours Inventory at the End of Each Month 25% of corresponding demand a. Compute the production net requirements b. Determine the production cost of producing exactly the quantities required for each period through regular labor by varying the workforce. Use the table below for your final solution/answer. Cost Item
Month January February March April May June Production Required Work Requirement Labor Days Hours Material Labor Costs Costs Hiring Firing Cost Cost Total Cost
Transcribed Image Text:Month January February March April May June Production Required Work Requirement Labor Days Hours Material Labor Costs Costs Hiring Firing Cost Cost Total Cost
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