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 2,300 1,700 June 2,100 March 1,700 1,900 July August April 1,700 1,500 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 $20 per unit per month. 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 = 1800 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). Ending Demand Production Inventory Stockouts Period Month (Units) December 200 1 January 1,500 1,800 February 1,700 1,800 March 1,700 1,800 4 April 1,700 1,800 May 2,300 1,800 6 June 2,100 1,800 7 July 1,900 1,800
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 2,300 1,700 June 2,100 March 1,700 1,900 July August April 1,700 1,500 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 $20 per unit per month. 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 = 1800 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). Ending Demand Production Inventory Stockouts Period Month (Units) December 200 1 January 1,500 1,800 February 1,700 1,800 March 1,700 1,800 4 April 1,700 1,800 May 2,300 1,800 6 June 2,100 1,800 7 July 1,900 1,800
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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