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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 Hire Layoff (Units) Quarter Forecast Production (Units) 1,300 1 1,700

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 Hire Layoff (Units) Quarter Forecast Production (Units) 1,300 1 1,700

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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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: Click the icon to view the demand forecast. E Click the icon to view the cost data. 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 1,000 cases per quarter and meets the forecast demand with inventory and subcontracting. 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 Layoff (Units) Hire Quarter Forecast Production Inits) 1,300 1 1,700 Costs/Other Data Previous quarter's output = 1,300 cases Beginning inventory = 0 cases Stockout cost of backorders = $140 per case Inventory holding cost = $45 per case at end of quarter Hiring employees = $40 per case Terminating employees = $70 per case Subcontracting cost = $65 per case Unit cost on regular time = $25 per case Overtime cost = $20 extra per case %3D %3D Quarter Forecast %3D 1 1,700 %3D 1,100 3 1,500 4 1,000 Capacity on regular time = 1,700 cases per quarter %3D
Transcribed Image Text: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: Click the icon to view the demand forecast. E Click the icon to view the cost data. 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 1,000 cases per quarter and meets the forecast demand with inventory and subcontracting. 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 Layoff (Units) Hire Quarter Forecast Production Inits) 1,300 1 1,700 Costs/Other Data Previous quarter's output = 1,300 cases Beginning inventory = 0 cases Stockout cost of backorders = $140 per case Inventory holding cost = $45 per case at end of quarter Hiring employees = $40 per case Terminating employees = $70 per case Subcontracting cost = $65 per case Unit cost on regular time = $25 per case Overtime cost = $20 extra per case %3D %3D Quarter Forecast %3D 1 1,700 %3D 1,100 3 1,500 4 1,000 Capacity on regular time = 1,700 cases per quarter %3D
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