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ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Manufacturing cost is $200 per server, equally divided between materials and labor. Inventory storage cost is $6 per month. A shortage of servers results in lost sales and is estimated to cost an overall $21 per unit short. The inventory on-hand at the beginning of the planning period is 200 units. Twelve labor hours are required per DVD player. The workday is nine hours. Develop an aggregate production schedule for the year using a constant workforce. For simplicity, assume 23 working days each month except July, when the plant closes down for three weeks' vacation (leaving eight working days). Assume that total production capacity is greater than or equal to total demand. (i.e., compute workforce level based on annual demand and annual capacity). (Leave the cells blank, whenever zero (0) is required. Indicate monthly shortages using a negative ending inventory level. Round up the "number of workers" to the next whole number and round down your "monthly production rates" to the next lower whole number.) January February March April May June July August September October November December Total Forecast 640 840 940 640 440 340 240 240 340 740 840 940 Beginning inventory 200 219 438 757 776 595 Available production 621 621 621 621 621 621 Ending inventory 219 438 757 776 595 314 Costs Lost sales Inventory 1,314 2,628 4,542 4,656 3,570 1,884 Total 1,314 2,628 4,542 4,656 3,570 1,884
Transcribed Image Text:Manufacturing cost is $200 per server, equally divided between materials and labor. Inventory storage cost is $6 per month. A shortage of servers results in lost sales and is estimated to cost an overall $21 per unit short. The inventory on-hand at the beginning of the planning period is 200 units. Twelve labor hours are required per DVD player. The workday is nine hours. Develop an aggregate production schedule for the year using a constant workforce. For simplicity, assume 23 working days each month except July, when the plant closes down for three weeks' vacation (leaving eight working days). Assume that total production capacity is greater than or equal to total demand. (i.e., compute workforce level based on annual demand and annual capacity). (Leave the cells blank, whenever zero (0) is required. Indicate monthly shortages using a negative ending inventory level. Round up the "number of workers" to the next whole number and round down your "monthly production rates" to the next lower whole number.) January February March April May June July August September October November December Total Forecast 640 840 940 640 440 340 240 240 340 740 840 940 Beginning inventory 200 219 438 757 776 595 Available production 621 621 621 621 621 621 Ending inventory 219 438 757 776 595 314 Costs Lost sales Inventory 1,314 2,628 4,542 4,656 3,570 1,884 Total 1,314 2,628 4,542 4,656 3,570 1,884
Shoney Video Concepts produces a line of video streaming servers that are linked to computers for storing movies. These devices have very fast access and large storage capacity. Shoney is trying to determine a production plan for the next 12 months. The main criterion for this plan is that the employment level is to be held constant over the period. Shoney is continuing in its R&D efforts to develop new applications and prefers not to prompt any adverse feelings from the local workforce. For the same reason, all employees should put in full workweeks, even if that is not the lowest-cost alternative. The forecast for the next 12 months is ITE MONTH FORECAST DEMAND MONTH FORECAST DEMAND January February 640 July August September October 240 840 240 March 940 340 April May 640 740 440 November 840 June 340 December 940 Manufacturing cost is $200 per server, equally divided between materials and labor. Inventory storage cost is $6 per month. A shortage of servers results in lost sales and is estimated to cost an overall $21 per unit short. The inventory on-hand at the beginning of the planning period is 200 units. Twelve labor hours are required per DVD player. The workday is nine hours. Develop an aggregate production schedule for the year using a constant workforce. For simplicity, assume 23 working days each month except July, when the plant closes down for three weeks' vacation (leaving eight working days). Assume that total production capacity is greater than or equal to total demand. (i.e., compute workforce level based on annual demand and annual capacity). (Leave the cells blank, whenever zero (0) is required. Indicate monthly shortages using a negative ending inventory level. Round up the "number of workers" to the next whole number and round down your "monthly production rates" to the next lower whole number.)
Transcribed Image Text:Shoney Video Concepts produces a line of video streaming servers that are linked to computers for storing movies. These devices have very fast access and large storage capacity. Shoney is trying to determine a production plan for the next 12 months. The main criterion for this plan is that the employment level is to be held constant over the period. Shoney is continuing in its R&D efforts to develop new applications and prefers not to prompt any adverse feelings from the local workforce. For the same reason, all employees should put in full workweeks, even if that is not the lowest-cost alternative. The forecast for the next 12 months is ITE MONTH FORECAST DEMAND MONTH FORECAST DEMAND January February 640 July August September October 240 840 240 March 940 340 April May 640 740 440 November 840 June 340 December 940 Manufacturing cost is $200 per server, equally divided between materials and labor. Inventory storage cost is $6 per month. A shortage of servers results in lost sales and is estimated to cost an overall $21 per unit short. The inventory on-hand at the beginning of the planning period is 200 units. Twelve labor hours are required per DVD player. The workday is nine hours. Develop an aggregate production schedule for the year using a constant workforce. For simplicity, assume 23 working days each month except July, when the plant closes down for three weeks' vacation (leaving eight working days). Assume that total production capacity is greater than or equal to total demand. (i.e., compute workforce level based on annual demand and annual capacity). (Leave the cells blank, whenever zero (0) is required. Indicate monthly shortages using a negative ending inventory level. Round up the "number of workers" to the next whole number and round down your "monthly production rates" to the next lower whole number.)
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