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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
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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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
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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