The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 1,400 May 2,100 February 1,700 June 2,100 March April 1,800 1,900 July August 1,800 1,800 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 $125 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 $75 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 1,400 in February incurs a cost of layoff for 200 units in February. 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.) Period Month 0 December Demand Production 1,600 Hire (Units) 1,600 Layoff Ending Stockouts (Units) Inventory (Units) 200 1 January 1,400 1,600 2 February 1,700 1,400 3 March 1,800 1,700 4 April 1,900 1,800 5 May 2,100 1,900 6 June 2,100 2,100 7 July 1,800 2,100 August 1,800 1,800 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 1,400 May 2,100 February 1,700 June 2,100 March April 1,800 1,900 July August 1,800 1,800 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 $125 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 $75 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 1,400 in February incurs a cost of layoff for 200 units in February. 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.) Period Month 0 December Demand Production 1,600 Hire (Units) 1,600 Layoff Ending Stockouts (Units) Inventory (Units) 200 1 January 1,400 1,600 2 February 1,700 1,400 3 March 1,800 1,700 4 April 1,900 1,800 5 May 2,100 1,900 6 June 2,100 2,100 7 July 1,800 2,100 August 1,800 1,800 The total cost, excluding normal time labor costs, is = $. (Enter your response as a whole number.)
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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Transcribed Image Text:The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows:
January
1,400
May
2,100
February
1,700
June
2,100
March
April
1,800
1,900
July
August
1,800
1,800
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 $125 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
$75 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 1,400 in February incurs a cost of layoff for 200 units in February.
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.)
Period Month
0
December
Demand Production
1,600
Hire
(Units)
1,600
Layoff Ending Stockouts
(Units) Inventory (Units)
200
1
January
1,400
1,600
2
February
1,700
1,400
3 March
1,800
1,700
4
April
1,900
1,800
5
May
2,100
1,900
6
June
2,100
2,100
7
July
1,800
2,100
August
1,800
1,800
The total cost, excluding normal time labor costs, is = $. (Enter your response as a whole number.)
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