Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
Principles of Operations Management: Sustainability and Supply Chain Management (10th Edition)
10th Edition
ISBN: 9780134181981
Author: Jay Heizer, Barry Render, Chuck Munson
Publisher: PEARSON
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Chapter 13, Problem 3P

The president of Hill Enterprises, Terri Hill, projects the firm’s aggregate demand requirements over the next 8 months as follows:

Chapter 13, Problem 3P, The president of Hill Enterprises, Terri Hill, projects the firms aggregate demand requirements over

Her operations manager is considering a new plan, which begins in January with 200 units on hand. Stockout cost of lost sales is $100 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-time costs. The plan is called plan A.

Plan A: Vary the workforce level to execute a strategy that produces the quantity demanded in the prior month. The December demand and rate of production are both 1,600 units per month. The cost of hiring additional workers is $5,000 per 100 units. The cost of laying off workers is $7,500 per 100 units. Evaluate this plan.

Note: Both hiring and layoff costs are incurred in the month of the change. For example, going from 1,600 in January to 1,400 in February incurs a cost of layoff for 200 units in February.

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Table shows the aggregate demand requirements of a manufacturing company. The operations manager is going to use a new plan, which begins in January with 200 units on hand and ends with zero inventory in August. Assume, Inventory holding cost is $20 per unit per month and stockout cost of lost sales is $100 per unit. The plan is called plan A. Compute the cost of plan A. Plan A: Vary the workforce level to execute a “chase” strategy by producing the quantity demanded in the prior month. The December demand and rate of production are both 1,600 units per month. The cost of hiring additional workers is $5,000 per 100 units. The cost of laying off workers is $7,500 per 100 units. Evaluate this plan.
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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 $20 per unit per​ month, and zero beginning and ending​ inventory, evaluate these two plans on an incremental cost​ basis:   Plan​ B: Vary the workforce to produce the prior​ month's demand. The firm produced 1,300 units in June. The cost of hiring additional workers is $35 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 1000 in August requires a layoff​ (and related​ costs) of 300 units in​ August).   A) see image B)The total​ cost, excluding normal time labor​ costs, for Plan B​ = C)The total stockout cost​ =
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