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 MONTH January February March April May June July August September October November December FORECAST DEMAND 580 780 880 580 380 300 180 Manufacturing cost is $150 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 $24 per unit short. Forecast Beginning inventory Available production 180 280 The Inventory on-hand at the beginning of the planning period is 150 units. Twelve labor hours are required per DVD player. The workday is nine hours. Ending inventory Costs Lost sales 680 780 880 Develop an aggregate production schedule for the year using a constant workforce. For simplicity, assume 22 working days each month except July, when the plant closes down for three weeks' vacation (leaving seven 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.) Inventory Total January 580 0 February 780 0 March 880 0 April 580 0 May 380 0 June 300 0 July 180 0 August September 180 이 280 0 October November December 680 780 0 880 0 Total
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 MONTH January February March April May June July August September October November December FORECAST DEMAND 580 780 880 580 380 300 180 Manufacturing cost is $150 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 $24 per unit short. Forecast Beginning inventory Available production 180 280 The Inventory on-hand at the beginning of the planning period is 150 units. Twelve labor hours are required per DVD player. The workday is nine hours. Ending inventory Costs Lost sales 680 780 880 Develop an aggregate production schedule for the year using a constant workforce. For simplicity, assume 22 working days each month except July, when the plant closes down for three weeks' vacation (leaving seven 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.) Inventory Total January 580 0 February 780 0 March 880 0 April 580 0 May 380 0 June 300 0 July 180 0 August September 180 이 280 0 October November December 680 780 0 880 0 Total
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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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
| MONTH
January
February
March
April
May
June
July
August
September
October
November
December
FORECAST DEMAND
Manufacturing cost is $150 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 $24 per unit short.
580
780
880
580
380
300
180
180
280
680
780
880
The inventory on-hand at the beginning of the planning period is 150 units. Twelve labor hours are required per DVD player. The
workday is nine hours.
Forecast
Beginning inventory
Available production
Develop an aggregate production schedule for the year using a constant workforce. For simplicity, assume 22 working days each
month except July, when the plant closes down for three weeks' vacation (leaving seven 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 (O) 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.)
Ending inventory
Costs
Lost sales
Inventory
Total
January
580
0
February
780
0
March
880
0
April
580
0
May
380
0
June
300
0
July
180
0
August
180
0
September
280
0
October
680
0
November
780
0
December
880
0
Total
0
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