Plan D O.T. Ending Inventory 200 Production Production Stockouts Month Demand (Units) (Units) (Units) O December 1 January 1,500 1,600 2 February 1,500 1,600 3 March 1,600 1,600 4 April 1,700 1,600 5 May 6 June 7 July 8 August 2,300 1,600 2,100 1,600 1,800 1,600 1.400 1,600
Plan D O.T. Ending Inventory 200 Production Production Stockouts Month Demand (Units) (Units) (Units) O December 1 January 1,500 1,600 2 February 1,500 1,600 3 March 1,600 1,600 4 April 1,700 1,600 5 May 6 June 7 July 8 August 2,300 1,600 2,100 1,600 1,800 1,600 1.400 1,600
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...
Related questions
Question
1
![The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows:
May
January
February
1,500
1,500
2,300
June
2,100
March
1,600
July
1,800
April
1,700
August
1,400
Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $65 per unit. Inventory
holding cost is $20 per unit per month. Ignore any idle-time costs. Evaluate the following plans D and E.
Plan D: Keep the current workforce stable at producing 1,600 units per month. In addition to the regular production, another 20% of the normal production units can be
produced in overtime at an additional cost of $55 per unit. A warehouse now constrains the maximum allowable inventory on hand to 600 units or less.
Note: Do not produce in overtime if production or inventory are adequate to cover demand.
Plan D
O.T.
Production
Production
Ending
Inventory
Stockouts
Month
Demand
(Units)
(Units)
(Units)
O December
1 January
200
1,500
1,600
2 February
1,500
1,600
3 March
1,600
1,600
4 April
1,700
1,600
5 May
2,300
1,600
6 June
2,100
1,600
7 July
1,800
1,600
8 August
1.400
1,600
OOOOD III](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fe70bce34-8d8f-4417-9381-3c6041722ad9%2F45f18ab5-6379-486f-a89e-77ea47d10e0f%2Fp6tr97i_processed.png&w=3840&q=75)
Transcribed Image Text:The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows:
May
January
February
1,500
1,500
2,300
June
2,100
March
1,600
July
1,800
April
1,700
August
1,400
Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $65 per unit. Inventory
holding cost is $20 per unit per month. Ignore any idle-time costs. Evaluate the following plans D and E.
Plan D: Keep the current workforce stable at producing 1,600 units per month. In addition to the regular production, another 20% of the normal production units can be
produced in overtime at an additional cost of $55 per unit. A warehouse now constrains the maximum allowable inventory on hand to 600 units or less.
Note: Do not produce in overtime if production or inventory are adequate to cover demand.
Plan D
O.T.
Production
Production
Ending
Inventory
Stockouts
Month
Demand
(Units)
(Units)
(Units)
O December
1 January
200
1,500
1,600
2 February
1,500
1,600
3 March
1,600
1,600
4 April
1,700
1,600
5 May
2,300
1,600
6 June
2,100
1,600
7 July
1,800
1,600
8 August
1.400
1,600
OOOOD III
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