The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows:January1,200MayFebruaryMarchApril1,500June2,1002,3001,6001,900JulyAugust1,7001,300Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $100 per unit. Inventory holding cost is $20 per unit permonth. Ignore any idle-time costs. The plan is called plan C.Plan C: Keep a stable workforce by maintaining a constant production rate equal to the average gross requirements excluding initial inventory and allow varying inventory levels.Conduct your analysis for January through August.The average monthly demand requirement = 1700 units. (Enter your response as a whole number.)In order to arrive at the costs, first compute the ending inventory and stockout units for each month by filling in the table below (enter your responses as whole numbers).EndingPeriod Month0DecemberDemand Production Inventory Stockouts (Units)2001January1,2001,7002February1,5001,7003 March1,6001,7004April1,9001,7005May2,1001,7006June2,3001,7007 July1,7001,7008August1,3001,700

Analysis of Plan C (Constant Production)Average Monthly Demand Requirement:1700 units (as…

Answered: The president of Hill Enterprises,…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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