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 $20 per unit per month, and zero beginning and ending inventory, evaluate these two plans 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 $70 per unit premium cost. Subcontracting capacity is limited to 800 units per month. (Enter all responses as whole numbers). Month 1 July 2 August 3 September 4 October 5 November 6 December Demand 1300 1150 1100 1600 1900 1900 Production 1,100 1,100 1,100 1,100 1,100 1,100 Ending Subcontract Inventory (Units) 0 0 0 0 0

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 $20 per unit per month, and zero beginning and ending inventory, evaluate these two plans 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 $70 per unit premium cost. Subcontracting capacity is limited to 800 units per month. (Enter all responses as whole numbers). Month 1 July 2 August 3 September 4 October 5 November 6 December Demand 1300 1150 1100 1600 1900 1900 Production 1,100 1,100 1,100 1,100 1,100 1,100 Ending Subcontract Inventory (Units) 0 0 0 0 0

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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