PP.52 A manufacturer of solid state drives (SSDs) has projected the next six months of demand to be as shown the table below: Supply/Demand Info Beginning Mar Apr Jun May Feb 60,800 57,200 45,000 40,000 50,200 Forecast (demand) Regular production Overtime production Subcontract production Ending inventory Hired employees Fired employees Total employees Cost variables are as follows: Cost Variables Labor cost hour Overtime costunit Subcontracting costunit Holding cost/unit/month Hiring cost employee Firing cost/employee 7.200 180 $15 $38 $32 58 $2,900 $5,300 Jan 48.000 Here is some additional relevant (capacity) information: Capacity Information Total labor hours/SSD Regular production units/employee/month Max regular production/month Max overtime production/month Max subcontractor production/month 200 55,200 3.000 5.200 Assuming the company uses regular production first, then ONLY overtime and/or subcontract production, answer the following questions: What is the regular production cost (over the six months from January through June) for a CHASE production plan? (Display your answer to the nearest whole number.) Number What is the total overtime production cost for this production plan? (Display your answer to the nearest whole number.) Number What is the total subcontract cost for this production plan? (Display your answer to the nearest whole number.) Number What is the total holding cost for this production plan? (Display your answer to the nearest whole number.) Number What is the total hire cost for this production plan? (Display your answer to the nearest whole number.) Number What is the total fire cost for this production plan? (Display your answer to the nearest whole number.)
PP.52 A manufacturer of solid state drives (SSDs) has projected the next six months of demand to be as shown the table below: Supply/Demand Info Beginning Mar Apr Jun May Feb 60,800 57,200 45,000 40,000 50,200 Forecast (demand) Regular production Overtime production Subcontract production Ending inventory Hired employees Fired employees Total employees Cost variables are as follows: Cost Variables Labor cost hour Overtime costunit Subcontracting costunit Holding cost/unit/month Hiring cost employee Firing cost/employee 7.200 180 $15 $38 $32 58 $2,900 $5,300 Jan 48.000 Here is some additional relevant (capacity) information: Capacity Information Total labor hours/SSD Regular production units/employee/month Max regular production/month Max overtime production/month Max subcontractor production/month 200 55,200 3.000 5.200 Assuming the company uses regular production first, then ONLY overtime and/or subcontract production, answer the following questions: What is the regular production cost (over the six months from January through June) for a CHASE production plan? (Display your answer to the nearest whole number.) Number What is the total overtime production cost for this production plan? (Display your answer to the nearest whole number.) Number What is the total subcontract cost for this production plan? (Display your answer to the nearest whole number.) Number What is the total holding cost for this production plan? (Display your answer to the nearest whole number.) Number What is the total hire cost for this production plan? (Display your answer to the nearest whole number.) Number What is the total fire cost for this production plan? (Display your answer to the nearest whole number.)
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
Related questions
Question
Transcribed Image Text:**Production Planning Exercise: Solid State Drives (SSD) Manufacturing**
**Scenario:**
PPE2, a manufacturer of solid-state drives (SSDs), has projected the next six months of demand. The demand details are as follows:
### Supply/Demand Information
| Demand/Production Info | Beginning | Jan | Feb | Mar | Apr | May | Jun |
|------------------------|-----------|-----|-----|-----|-----|-----|-----|
| Forecast demand (units) | | 48,600 | 60,800 | 57,200 | 45,600 | 46,000 | 56,200 |
| Regular production | | | | | | | |
| Overtime production | | | | | | | |
| Subcontract production | | | | | | | |
| Ending inventory | | | | | | | |
| Hired employees | | | | | | | |
| Fired employees | | | | | | | |
| Total employees | | 180 | | | | | |
### Cost Variables
| Variables | Cost ($) |
|-----------------------------|-----------------|
| Labor cost/hour | $15 |
| Overtime cost/unit | $38 |
| Subcontracting cost/unit | $32 |
| Holding cost/unit/month | $8 |
| Hiring cost/employee | $2,900 |
| Firing cost/employee | $5,300 |
### Capacity Information
| Capacity Info | Value |
|---------------------------------|--------------|
| Total labor hours/SSD | 3 |
| Regular production units/employee/month | 200 |
| Maximum regular production/month | 65,200 |
| Maximum overtime production/month | 3,000 |
| Maximum subcontract production/month | 5,200 |
### Questions:
Assuming the company uses regular production first, then ONLY overtime and/or subcontract production, answer the following questions:
1. **What is the regular production cost (over the six months from January through June) for a CHASE production plan?**
*(Display your answer to the nearest whole number.)*
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 3 images
