carrying costs of $20 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis: Plan B: Vary the workforce to produce the prior month's demand. The firm produced 1,300 units in June. The cost of hiring additional workers is $30 per unit produ is $65 per unit cut back. (Enter all responses as whole numbers.) Note: Both hiring and layoff costs are incurred in the month of the change (i.e., going from production of 1,300 in July to 1200 in August requires a layoff (and relate August). Layoff (Units) Ending Inventory Stockouts (Units) Hire Month Demand Production (Units) 1 July 1200 2 August 1300 3 September 1200 4 October 1700 5 November 1650 6 December 1650
carrying costs of $20 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis: Plan B: Vary the workforce to produce the prior month's demand. The firm produced 1,300 units in June. The cost of hiring additional workers is $30 per unit produ is $65 per unit cut back. (Enter all responses as whole numbers.) Note: Both hiring and layoff costs are incurred in the month of the change (i.e., going from production of 1,300 in July to 1200 in August requires a layoff (and relate August). Layoff (Units) Ending Inventory Stockouts (Units) Hire Month Demand Production (Units) 1 July 1200 2 August 1300 3 September 1200 4 October 1700 5 November 1650 6 December 1650
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
Related questions
Question
![The S&OP team at Kansas Furniture, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $125 per unit, inventory
carrying costs of $20 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis:
Plan B: Vary the workforce to produce the prior month's demand. The firm produced 1,300 units in June. The cost of hiring additional workers is $30 per unit produced. The cost of layoffs
is $65 per unit cut back. (Enter all responses as whole numbers.)
Note: Both hiring and layoff costs are incurred in the month of the change (i.e., going from production of 1,300 in July to 1200 in August requires a layoff (and related costs) of 100 units in
August).
Ending
Inventory
Hire
Layoff
(Units)
Stockouts
Month
Demand
Production
(Units)
(Units)
1 July
1200
2 August
1300
3 September
1200
4
October
1700
November
1650
6.
December
1650](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F60ae2238-d375-4701-9aec-2226c586eada%2Fc1a5e3fd-e63e-44dc-8bd3-25bac8bab3b3%2Fkdlu6ti_processed.png&w=3840&q=75)
Transcribed Image Text:The S&OP team at Kansas Furniture, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $125 per unit, inventory
carrying costs of $20 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis:
Plan B: Vary the workforce to produce the prior month's demand. The firm produced 1,300 units in June. The cost of hiring additional workers is $30 per unit produced. The cost of layoffs
is $65 per unit cut back. (Enter all responses as whole numbers.)
Note: Both hiring and layoff costs are incurred in the month of the change (i.e., going from production of 1,300 in July to 1200 in August requires a layoff (and related costs) of 100 units in
August).
Ending
Inventory
Hire
Layoff
(Units)
Stockouts
Month
Demand
Production
(Units)
(Units)
1 July
1200
2 August
1300
3 September
1200
4
October
1700
November
1650
6.
December
1650
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