The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: May 2,200 June 2,200 January February March April July 1,800 August 1,400 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 $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 = 1775 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). D Period Month Demand Production 0 December 1 January 2 February 3 4 5 6 7 8 1,400 1,600 1,800 1,800 March April May June July August 1,400 1,600 1,800 1,800 2,200 2,200 1,800 1,400 1,775 1,775 1,775 1,775 1,775 1,775 1,775 1,775 Ending Inventory Stockouts (Units) 200
The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: May 2,200 June 2,200 January February March April July 1,800 August 1,400 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 $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 = 1775 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). D Period Month Demand Production 0 December 1 January 2 February 3 4 5 6 7 8 1,400 1,600 1,800 1,800 March April May June July August 1,400 1,600 1,800 1,800 2,200 2,200 1,800 1,400 1,775 1,775 1,775 1,775 1,775 1,775 1,775 1,775 Ending Inventory Stockouts (Units) 200
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:
May
January
February
2,200
2,200
June
July
1,800
March
April
August
1,400
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 $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 = 1775 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).
Period Month Demand Production
December
0
1
January
February
2
32 5678
4
March
1,400
1,600
1,800
1,800
April
May
June
July
August
1,400
1,600
1,800
1,800
2,200
2,200
1,800
1,400
1,775
1,775
1,775
1,775
1,775
1,775
1,775
1,775
Ending
Inventory Stockouts (Units)
200
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