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 1,600 July 1,700 April 1,900 August 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 $60 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-time costs. Evaluate the following plans D and E. Plan D: Keep the current workforce stable at producing 1,600 units per month. In addition to the regular production, another 20% of the normal production units can be produced in overtime at an additional cost of $50 per unit. A warehouse now constrains the maximum allowable inventory on hand to 600 units or less. Note: Do not produce in overtime if production or inventory are adequate to cover demand. Plan D Month Demand Production (Units) O.T. Production (Units) Ending Inventory Stockouts (Units) 0 December 200 1 January 1,400 1,600 nothing nothing nothing 2 February 1,700 1,600 nothing nothing nothing 3 March 1,600 1,600 nothing nothing nothing 4 April 1,900 1,600 nothing nothing nothing 5 May 2,100 1,600 nothing nothing nothing 6 June 2,100 1,600 nothing nothing nothing 7 July 1,700 1,600 nothing nothing nothing 8 August 1,500 1,600 nothing nothing nothing The total overtime production cost = $ ? (Enter your response as a whole number.) The total inventory holding cost for January through August = $ ? (Enter your response as a whole number.) The total stockout cost = $ ? (Enter your response as a whole number.) The total cost, excluding normal time labor costs, for Plan D = $ ? (Enter your response as a whole number.) Plan E: Keep the current workforce, which is producing 1,600 units per month, and subcontract to meet the rest of the demand. Subcontract cost is $ 75 per unit. Subcontracting capacity is limited to 500 units per month. The warehouse and overtime constraints from Plan D do not apply to this plan. Plan E Month Demand Production (Units) Subcontract (Units) Ending Inventory 0 December 200 1 January 1,400 1,600 nothing nothing 2 February 1,700 1,600 nothing nothing 3 March 1,600 1,600 nothing nothing 4 April 1,900 1,600 nothing nothing 5 May 2,100 1,600 nothing nothing 6 June 2,100 1,600 nothing nothing 7 July 1,700 1,600 nothing nothing 8 August 1,500 1,600 nothing nothing The total subcontracting cost = $ ? (Enter your response as a whole number.) The total inventory holding cost for January through August = $ ? (Enter your response as a whole number.) The total cost, excluding normal time labor costs, for Plan E = $ ? (Enter your response as a whole number.)
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
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 |
1,600 |
July |
1,700 |
|
April |
1,900 |
August |
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 $60 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-time costs. Evaluate the following plans D and E.
Plan D: Keep the current workforce stable at producing 1,600 units per month. In addition to the regular production, another 20% of the normal production units can be produced in overtime at an additional cost of $50 per unit. A warehouse now constrains the maximum allowable inventory on hand to 600 units or less.
Note: Do not produce in overtime if production or inventory are adequate to cover demand.
|
Plan D |
||||||||
|
Month |
Demand |
Production (Units) |
O.T. Production (Units) |
Ending Inventory |
Stockouts (Units) |
|||
|
0 |
December |
200 |
||||||
|
1 |
January |
1,400 |
1,600 |
nothing |
nothing |
nothing |
||
|
2 |
February |
1,700 |
1,600 |
nothing |
nothing |
nothing |
||
|
3 |
March |
1,600 |
1,600 |
nothing |
nothing |
nothing |
||
|
4 |
April |
1,900 |
1,600 |
nothing |
nothing |
nothing |
||
|
5 |
May |
2,100 |
1,600 |
nothing |
nothing |
nothing |
||
|
6 |
June |
2,100 |
1,600 |
nothing |
nothing |
nothing |
||
|
7 |
July |
1,700 |
1,600 |
nothing |
nothing |
nothing |
||
|
8 |
August |
1,500 |
1,600 |
nothing |
nothing |
nothing |
The total overtime production cost = $ ? (Enter your response as a whole number.)
The total inventory holding cost for January through August = $ ? (Enter your response as a whole number.)
The total stockout cost = $ ? (Enter your response as a whole number.)
The total cost, excluding normal time labor costs, for Plan D = $ ? (Enter your response as a whole number.)
Plan E: Keep the current workforce, which is producing 1,600 units per month, and subcontract to meet the rest of the demand. Subcontract cost is $ 75 per unit. Subcontracting capacity is limited to 500 units per month. The warehouse and overtime constraints from Plan D do not apply to this plan.
|
Plan E |
|||||||
|
Month |
Demand |
Production (Units) |
Subcontract (Units) |
Ending Inventory |
|||
|
0 |
December |
200 |
|||||
|
1 |
January |
1,400 |
1,600 |
nothing |
nothing |
||
|
2 |
February |
1,700 |
1,600 |
nothing |
nothing |
||
|
3 |
March |
1,600 |
1,600 |
nothing |
nothing |
||
|
4 |
April |
1,900 |
1,600 |
nothing |
nothing |
||
|
5 |
May |
2,100 |
1,600 |
nothing |
nothing |
||
|
6 |
June |
2,100 |
1,600 |
nothing |
nothing |
||
|
7 |
July |
1,700 |
1,600 |
nothing |
nothing |
||
|
8 |
August |
1,500 |
1,600 |
nothing |
nothing |
The total subcontracting cost = $ ? (Enter your response as a whole number.)
The total inventory holding cost for January through August = $ ? (Enter your response as a whole number.)
The total cost, excluding normal time labor costs, for Plan E = $ ? (Enter your response as a whole number.)
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