EP PRIN.OF OPERATIONS MGMT.-MYOMLAB
EP PRIN.OF OPERATIONS MGMT.-MYOMLAB
10th Edition
ISBN: 9780134183848
Author: HEIZER
Publisher: PEARSON CO
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Chapter 13, Problem 15P
Summary Introduction

To determine: The minimum cost using transportation method.

Introduction: Aggregate planning using transportation method helps to attain the minimum cost with the optimal plan. The major advantage of transportation method is to achieve the optimal solution using optimal plans.

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10. The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: 2,100 January February 1,200 May 1,500 June 2,100 1,700 1,800 March July August 1,900 April 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 $20 per unit per month. Ignore any idle-time costs. The plan is called plan B. Plan B: Produce at a constant rate of 1,200 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 900 units per month. Evaluate this plan by computing the costs for January through August. 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).…
Nozone, Inc., a manufacturer of Freon recovery units (for automotive air conditioner maintenance), experiences a strongly seasonal demand pattern, driven by the summer air conditioning season. This year Nozone has put together a six-month production plan, where the monthly demands D, for recovery units are given in the table below. Each recovery unit is manufactured from one chassis assembly plus a variety of other parts. The chassis assemblies are produced in the machining center. Since there is a single chassis assembly per recovery unit, the demands in the table below also represent demands for chassis assemblies. The unit cost, fixed setup cost and monthly holding cost for chassis assemblies are also given in this table. The fixed setup cost is the firm's estimate of the cost to changeover the machining center to produce chassis assemblies, including labor and materials cost and the cost of disruption of other product lines. t D₁ C₁ A₁ h₂ 1 1,000 50 2,000 1 2 1,200 50 2,000 1 3 500…
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