QUARTER FORECAST 1,800 1,100 1,600 2 olo 3 4 1ms 900 COSTS/OTHER DATA Previous quarter's output = 1,300 cases m ode la %3D Beginning inventory = 0 cases Stockout cost = $150 per case Sow Inventory holding cost = $40 per case at end of quarter t Hiring employees = $40 per case Terminating emplloyees = $80 per case Subcontracting cost = $60 per case Unit cost on regular time = $30 per case Overtime cost = $15 extra per case Capacity on regular time = 1,800 cases per quarter
QUARTER FORECAST 1,800 1,100 1,600 2 olo 3 4 1ms 900 COSTS/OTHER DATA Previous quarter's output = 1,300 cases m ode la %3D Beginning inventory = 0 cases Stockout cost = $150 per case Sow Inventory holding cost = $40 per case at end of quarter t Hiring employees = $40 per case Terminating emplloyees = $80 per case Subcontracting cost = $60 per case Unit cost on regular time = $30 per case Overtime cost = $15 extra per case Capacity on regular time = 1,800 cases per quarter
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter7: Nonlinear Optimization Models
Section7.3: Pricing Models
Problem 3P: Pricing Decisions at Madison The Madison Company manufactures and retails a certain product. The...
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Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mitten thai, the production planner, has assembled the fo llowing cost data and demand options he wants to evaluate are: • Plan A: a strategy that hires and fires personnel as necessary to meet the forecast. • Plan B: a level strategy. • Plan C: a level strategy that produces 1,200 cases per quarter and meets the fo recast demand with inventory and subcontracting. a) Which strategy is the lowest-cost plan? b) If you are John's boss, the VP for operations, which p lan do you implement and why? |
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