The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: 2,200 January 1,400 May February 1,600 June 2,200 March April 1,800 1,800 July August 1,800 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 $100 per unit. Inventory holding cost is $25 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. Period Month Demand Production 0 December 1 January 1,400 1,775 2 February 1,600 1,775 3 March 1,800 1,775 4 April 1,800 1,775 5 May 2,200 1,775 6 June 2,200 1,775 7 July 1,800 1,775 8 August 1,400 1,775
The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: 2,200 January 1,400 May February 1,600 June 2,200 March April 1,800 1,800 July August 1,800 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 $100 per unit. Inventory holding cost is $25 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. Period Month Demand Production 0 December 1 January 1,400 1,775 2 February 1,600 1,775 3 March 1,800 1,775 4 April 1,800 1,775 5 May 2,200 1,775 6 June 2,200 1,775 7 July 1,800 1,775 8 August 1,400 1,775
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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Question
a) The average monthly demand requirementequals = ___ units. (whole number)
b) The total stockout cost = $____(whole number.)
c) The total inventory carrying cost = $____(whole number)
d) The total cost, excluding normal time labor costs, is = $____(whole number.)
Transcribed Image Text:The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows:
2,200
January
1,400
May
February
1,600
June
2,200
March
April
1,800
1,800
July
August
1,800
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 $100 per unit.
Inventory holding cost is $25 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.
Transcribed Image Text:Period Month Demand Production
0
December
1
January
1,400
1,775
2 February
1,600
1,775
3
March
1,800
1,775
4
April
1,800
1,775
5
May
2,200
1,775
6
June
2,200
1,775
7 July
1,800
1,775
8 August
1,400
1,775
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