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 2,300 February 1,700 June 2,100 March 1,600 July 1,900 April 1,700 August 1,300 Her operations manager is considering a new plan, which begins in January with 200 units on hand and ends with zero inventory. 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 B. Plan B: Produce at a constant rate of 1,300 units per month, which will meet minimum demands. Then use subcontracting, with additional units at a premium price of $75 per unit. Subcontracting capacity is limited to 1,000 units per month. Evaluate this plan by computing the costs for January through August. Part 2 In order to arrive at the costs, first compute the ending inventory and subcontracting units for each month by filling in the table below (enter your responses as whole numbers). Period Month Demand Production Ending Inventory Subcontract Units 0 December 200 1 January 1,400 1,300 enter your response here enter your response here 2 February 1,700 1,300 enter your response here enter your response here 3 March 1,600 1,300 enter your response here enter your response here 4 April 1,700 1,300 enter your response here enter your response here 5 May 2,300 1,300 enter your response here enter your response here 6 June 2,100 1,300 enter your response here enter your response here 7 July 1,900 1,300 enter your response here enter your response here 8 August 1,300 1,300 enter your response here enter your response here The total subcontracting cost= (Enter your response as a whole number.) The total inventory carrying cost = (Enter your response as a whole number.) The total cost, excluding normal time labor costs, is = (Enter your response as a whole number.)

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 2,300 February 1,700 June 2,100 March 1,600 July 1,900 April 1,700 August 1,300 Her operations manager is considering a new plan, which begins in January with 200 units on hand and ends with zero inventory. 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 B. Plan B: Produce at a constant rate of 1,300 units per month, which will meet minimum demands. Then use subcontracting, with additional units at a premium price of $75 per unit. Subcontracting capacity is limited to 1,000 units per month. Evaluate this plan by computing the costs for January through August. Part 2 In order to arrive at the costs, first compute the ending inventory and subcontracting units for each month by filling in the table below (enter your responses as whole numbers). Period Month Demand Production Ending Inventory Subcontract Units 0 December 200 1 January 1,400 1,300 enter your response here enter your response here 2 February 1,700 1,300 enter your response here enter your response here 3 March 1,600 1,300 enter your response here enter your response here 4 April 1,700 1,300 enter your response here enter your response here 5 May 2,300 1,300 enter your response here enter your response here 6 June 2,100 1,300 enter your response here enter your response here 7 July 1,900 1,300 enter your response here enter your response here 8 August 1,300 1,300 enter your response here enter your response here The total subcontracting cost= (Enter your response as a whole number.) The total inventory carrying cost = (Enter your response as a whole number.) The total cost, excluding normal time labor costs, is = (Enter your response as a whole number.)

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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Part 2

In order to arrive at the costs, first compute the ending inventory and subcontracting units for each month by filling in the table below (enter your responses as whole numbers).

Period	Month	Demand	Production	Ending Inventory	Subcontract Units
0	December			200
1	January	1,400	1,300	enter your response here	enter your response here
2	February	1,700	1,300	enter your response here	enter your response here
3	March	1,600	1,300	enter your response here	enter your response here
4	April	1,700	1,300	enter your response here	enter your response here
5	May	2,300	1,300	enter your response here	enter your response here
6	June	2,100	1,300	enter your response here	enter your response here
7	July	1,900	1,300	enter your response here	enter your response here
8	August	1,300	1,300	enter your response here	enter your response here

The total subcontracting cost=
(Enter your response as a whole number.)

The total inventory carrying cost =
(Enter your response as a whole number.)

The total cost, excluding normal time labor costs, is =

(Enter your response as a whole number.)

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