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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: January February 1,500 May 2,200 1,700 June 2,200 March 1,600 July August 1,900 April 1,700 1,900 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 $100 per unit. Inventory holding cost is $25 per unit per month. Ignore any idle-time costs. The plan is called plan A. Plan A: Vary the workforce level to execute a strategy that produces the quantity demanded in the prior month. The December demand and rate of production are both 1,600 units per month. The cost of hiring additional workers is $50 per unit. The cost of laying off workers is $80 per unit. Evaluate this plan. (Enter all responses as whole numbers.) Note: Both hiring and layoff costs are incurred in the month of the change. For example, going from 1,600 in January to 1,500 in February incurs a cost of layoff for 100 units in February. Hire (Units) Layoff (Units) Ending Inventory 200 Stockouts (Units) Period Month Demand Production December January 1,600 1,500 1,600 1,600 1 February 1,700 1,500 3 March 1,600 1,700 April 1,700 1,600 May 2,200 1,700 6. June 2,200 2,200 7 July 1,900 2,200 8 August 1,900 1,900 The total cost of hirings = $ (Enter your response as a whole number.) The total cost of layoffs = $ (Enter your response as a whole number.) The total inventory carrying cost = $ (Enter your response as a whole number.) The total stockout cost = $ (Enter your response as a whole number.) The total cost, excluding normal time labor costs, is = $ (Enter your response as a whole number.)

The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January February 1,500 May 2,200 1,700 June 2,200 March 1,600 July August 1,900 April 1,700 1,900 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 $100 per unit. Inventory holding cost is $25 per unit per month. Ignore any idle-time costs. The plan is called plan A. Plan A: Vary the workforce level to execute a strategy that produces the quantity demanded in the prior month. The December demand and rate of production are both 1,600 units per month. The cost of hiring additional workers is $50 per unit. The cost of laying off workers is $80 per unit. Evaluate this plan. (Enter all responses as whole numbers.) Note: Both hiring and layoff costs are incurred in the month of the change. For example, going from 1,600 in January to 1,500 in February incurs a cost of layoff for 100 units in February. Hire (Units) Layoff (Units) Ending Inventory 200 Stockouts (Units) Period Month Demand Production December January 1,600 1,500 1,600 1,600 1 February 1,700 1,500 3 March 1,600 1,700 April 1,700 1,600 May 2,200 1,700 6. June 2,200 2,200 7 July 1,900 2,200 8 August 1,900 1,900 The total cost of hirings = $ (Enter your response as a whole number.) The total cost of layoffs = $ (Enter your response as a whole number.) The total inventory carrying cost = $ (Enter your response as a whole number.) The total stockout cost = $ (Enter your response as a whole number.) The total cost, excluding normal time labor costs, is = $ (Enter your response as a whole number.)

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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Can you assist me with Question 4.4. Thank you kindly
**Title: Aggregate Demand and Production Planning at Hill Enterprises** **Introduction:** Terri Hill, the president of Hill Enterprises, forecasts the firm's aggregate demand requirements over the forthcoming eight months. Her operations manager is evaluating a plan to meet this demand using a strategic workforce level adjustment, termed Plan A. This involves aligning production to the quantity demanded in the previous month, beginning with a standing inventory of 200 units. **Demand Projection (Monthly):** - **January:** 1,500 units - **February:** 1,700 units - **March:** 1,600 units - **April:** 1,700 units - **May:** 2,200 units - **June:** 2,200 units - **July:** 1,900 units - **August:** 1,900 units **Cost Metrics:** - Inventory holding cost: $25/unit per month - Stockout cost: $100/unit of lost sales - Hiring cost: $50/worker - Layoff cost: $80/worker **Plan A:** - Adjust the workforce to produce quantities aligned with the prior month’s demand. - Deduct any incurred stockout, hiring, or layoff costs from the monthly budget. **Planning Notes:** Hiring and layoff expenses are accounted for in the same month in which changes occur. For instance, transitioning from a requirement of 1,600 units in January to 1,500 units in February incurs layoff costs for 100 units. **Analysis Table:** | Period | Month | Demand (units) | Production (units) | Hire (units) | Layoff (units) | Ending Inventory (units) | Stockouts (units) | |--------|---------|----------------|--------------------|--------------|----------------|--------------------------|-------------------| | 0 | December| 1,600 | 1,600 | | | 200 | | | 1 | January | 1,500 | 1,600 | | | | | | 2 | February| 1,700 | 1,500 | | | | | | 3 | March | 1,600 | 1,700 | | | | | | 4 | April | 1,700 |
Transcribed Image Text:**Title: Aggregate Demand and Production Planning at Hill Enterprises** **Introduction:** Terri Hill, the president of Hill Enterprises, forecasts the firm's aggregate demand requirements over the forthcoming eight months. Her operations manager is evaluating a plan to meet this demand using a strategic workforce level adjustment, termed Plan A. This involves aligning production to the quantity demanded in the previous month, beginning with a standing inventory of 200 units. **Demand Projection (Monthly):** - **January:** 1,500 units - **February:** 1,700 units - **March:** 1,600 units - **April:** 1,700 units - **May:** 2,200 units - **June:** 2,200 units - **July:** 1,900 units - **August:** 1,900 units **Cost Metrics:** - Inventory holding cost: $25/unit per month - Stockout cost: $100/unit of lost sales - Hiring cost: $50/worker - Layoff cost: $80/worker **Plan A:** - Adjust the workforce to produce quantities aligned with the prior month’s demand. - Deduct any incurred stockout, hiring, or layoff costs from the monthly budget. **Planning Notes:** Hiring and layoff expenses are accounted for in the same month in which changes occur. For instance, transitioning from a requirement of 1,600 units in January to 1,500 units in February incurs layoff costs for 100 units. **Analysis Table:** | Period | Month | Demand (units) | Production (units) | Hire (units) | Layoff (units) | Ending Inventory (units) | Stockouts (units) | |--------|---------|----------------|--------------------|--------------|----------------|--------------------------|-------------------| | 0 | December| 1,600 | 1,600 | | | 200 | | | 1 | January | 1,500 | 1,600 | | | | | | 2 | February| 1,700 | 1,500 | | | | | | 3 | March | 1,600 | 1,700 | | | | | | 4 | April | 1,700 |
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