The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January February 1,400 May 2,200 1,500 June 2,100 March 1,800 July August 1,700 April 1,700 1,700 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 $55 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. Ending Inventory Hire Stockouts Layoff (Units) Period Month Demand Production (Units) (Units) 1,600 1,600 December 1,600 1,400 200 1 January February 1,500 1,400 3 March 1,800 1,500 4 April 1,700 1,800 May 2,200 1,700 6 June 2,100 2,200 7 July 1,700 2,100 8 August 1,700 1,700
The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January February 1,400 May 2,200 1,500 June 2,100 March 1,800 July August 1,700 April 1,700 1,700 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 $55 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. Ending Inventory Hire Stockouts Layoff (Units) Period Month Demand Production (Units) (Units) 1,600 1,600 December 1,600 1,400 200 1 January February 1,500 1,400 3 March 1,800 1,500 4 April 1,700 1,800 May 2,200 1,700 6 June 2,100 2,200 7 July 1,700 2,100 8 August 1,700 1,700
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
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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
2,200
February
1,500
June
2,100
March
1,800
July
1,700
April
1,700
August
1,700
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
$55 per unit. The cost of laying off workers is $75 per unit. Evaluate this plan. (Enter all responses as whole
питbers.)
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.
Hire
Layoff
Ending
Inventory
200
Stockouts
Period
Month
Demand
Production
(Units)
(Units)
(Units)
December
1,600
1,400
1,600
1,600
1
January
February
1,500
1,400
3
March
1,800
1,500
4
April
1,700
1,800
5
May
2,200
1,700
June
2,100
2,200
7
July
1,700
2,100
8
August
1,700
1,700
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