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The S&OP team at Kansas Furniture, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $100 per unit, inventory carrying costs of $30 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis: Plan A: Produce at a steady rate (equal to minimum requirements) of 1,100 units per month and subcontract additional units at a $65 per unit premium cost. Subcontracting capacity is limited to 800 units per month. (Enter all responses as whole numbers). The total cost, excluding normal time labor costs, for Plan A = $ Month Month 1 July 2 August 3 4 October 5 November 6 December 1 2 3 September 4 October 5 November 6 December July August September Demand 1300 1150 1100 1600 1900 1200 Production 1,100 1,100 1,100 1,100 1,100 1,100 Ending Inventory 0 0 0 0 0 0 (Enter your response as a whole number.) he S&OP team at Kansas Furniture, led by David Angelow, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $125 per unit, ventory carrying costs of $20 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis: Demand 1200 1300 1200 1700 1650 1650 lan B: Vary the workforce to produce the prior month's demand. Demand was 1,300 units in June. The cost of hiring additional workers is $30 per unit produced. The cost of layoffs is $65 per unit ut back. (Enter all responses as whole numbers.) ote: Both hiring and layoff costs are incurred in the month of the change (i.e., going from production of 1,300 in July to 1200 in August requires a layoff (and related costs) of 100 units in August). D Subcontract (Units) 200 50 0 500 800 100 Hire Layoff Production (Units) (Units) Ending Inventory Stockouts (Units)

The S&OP team at Kansas Furniture, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $100 per unit, inventory carrying costs of $30 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis: Plan A: Produce at a steady rate (equal to minimum requirements) of 1,100 units per month and subcontract additional units at a $65 per unit premium cost. Subcontracting capacity is limited to 800 units per month. (Enter all responses as whole numbers). The total cost, excluding normal time labor costs, for Plan A = $ Month Month 1 July 2 August 3 4 October 5 November 6 December 1 2 3 September 4 October 5 November 6 December July August September Demand 1300 1150 1100 1600 1900 1200 Production 1,100 1,100 1,100 1,100 1,100 1,100 Ending Inventory 0 0 0 0 0 0 (Enter your response as a whole number.) he S&OP team at Kansas Furniture, led by David Angelow, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $125 per unit, ventory carrying costs of $20 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis: Demand 1200 1300 1200 1700 1650 1650 lan B: Vary the workforce to produce the prior month's demand. Demand was 1,300 units in June. The cost of hiring additional workers is $30 per unit produced. The cost of layoffs is $65 per unit ut back. (Enter all responses as whole numbers.) ote: Both hiring and layoff costs are incurred in the month of the change (i.e., going from production of 1,300 in July to 1200 in August requires a layoff (and related costs) of 100 units in August). D Subcontract (Units) 200 50 0 500 800 100 Hire Layoff Production (Units) (Units) Ending Inventory Stockouts (Units)

Practical Management Science
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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The S&OP team at Kansas Furniture, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $100 per unit, inventory carrying costs of $30 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis: Plan A: Produce at a steady rate (equal to minimum requirements) of 1,100 units per month and subcontract additional units at a $65 per unit premium cost. Subcontracting capacity is limited to 800 units per month. (Enter all responses as whole numbers). Month Month 1 July 2 August 3 September 4 October 5 November 6 December 1 2 3 September 4 October 5 November 6 December July August The total cost, excluding normal time labor costs, for Plan A = $ (Enter your response as a whole number.) Demand 1300 1150 1100 1600 1900 1200 Production 1,100 1,100 1,100 1,100 1,100 1,100 The S&OP team at Kansas Furniture, led by David Angelow, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $125 per unit, inventory carrying costs of $20 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis: Demand 1200 1300 1200 1700 1650 1650 Ending Inventory 0 0 0 0 0 0 Plan B: Vary the workforce to produce the prior month's demand. Demand was 1,300 units in June. The cost of hiring additional workers is $30 per unit produced. The cost of layoffs is $65 per unit cut back. (Enter all responses as whole numbers.) Note: Both hiring and layoff costs are incurred in the month of the change (i.e., going from production of 1,300 in July to 1200 in August requires a layoff (and related costs) of 100 units in August). Hire (Units) Layoff Ending (Units) Inventory Stockouts (Units) Production D Subcontract (Units) 200 50 0 500 800 100
Transcribed Image Text:The S&OP team at Kansas Furniture, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $100 per unit, inventory carrying costs of $30 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis: Plan A: Produce at a steady rate (equal to minimum requirements) of 1,100 units per month and subcontract additional units at a $65 per unit premium cost. Subcontracting capacity is limited to 800 units per month. (Enter all responses as whole numbers). Month Month 1 July 2 August 3 September 4 October 5 November 6 December 1 2 3 September 4 October 5 November 6 December July August The total cost, excluding normal time labor costs, for Plan A = $ (Enter your response as a whole number.) Demand 1300 1150 1100 1600 1900 1200 Production 1,100 1,100 1,100 1,100 1,100 1,100 The S&OP team at Kansas Furniture, led by David Angelow, has received estimates of demand requirements as shown in the table. Assuming one-time stockout costs for lost sales of $125 per unit, inventory carrying costs of $20 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis: Demand 1200 1300 1200 1700 1650 1650 Ending Inventory 0 0 0 0 0 0 Plan B: Vary the workforce to produce the prior month's demand. Demand was 1,300 units in June. The cost of hiring additional workers is $30 per unit produced. The cost of layoffs is $65 per unit cut back. (Enter all responses as whole numbers.) Note: Both hiring and layoff costs are incurred in the month of the change (i.e., going from production of 1,300 in July to 1200 in August requires a layoff (and related costs) of 100 units in August). Hire (Units) Layoff Ending (Units) Inventory Stockouts (Units) Production D Subcontract (Units) 200 50 0 500 800 100
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