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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 $125 per unit, inventory carrying costs of $25 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 $70 per unit premium cost. Subcontracting capacity is limited to 800 units per month (Enter all responses as whole numbers) Subcontract (Units) Month 1 July 2 August 3 September 4 October 5 November 6 December Ending Demand Production Inventory 1300 1,100 0 1150 1.100 U 1100 1,100 U 1600 1.100 U 1900 1,100 U 1200 1,100 0 The total cost, excluding normal time labor costs for Pian A=SL (Enter your response as a whole number)
3. A Juarez, Mexico, manufacturer of roofing supplies has developed monthly forecasts for a family of products. Data for the 6-month period January to June are presented in the table below. There are 8 hours of production per day a) The firm would like to begin development of an aggregate plan. For this plan, plan 5, the firm wishes to maintain a constant workforce of 6, using subcontracting to meet remaining demand. Evaluate this plan To determine whether this plan is desirable, first calculate demand per day for each month (enter your responses rounded to the nearest whole number) Table 1 Avg Dem Per Other data Production Demand Prod. Day Inventory carrying cost $8 per unit per month Month Days Forecast Subcontracting cost per unit 512 per unit 1 January 22 800 Average pay rate $5 per hour (S40 per day) 2 February 18 650 Overtime pay Rate $7 per hour (above 8 bus per 3 March 21 850 day) Labor-hours per unit 1.6 brs per unit 4 April 21 1.100 Cost of increasing daily $300 per unit 5 May 22 1.200 production rato (hiring & 6 June 20 1.250 training) Cost of decreasing daly $600 per unit production rate (layoffs The production rate per day units. (Enter your response as a whole number) Fill in the table below. (Enter your responses as whole numbers) Regular Production Subcontract (Units) Month 1 January 2 February 3 March 4 April 5 May 6 June Demand 800 650 850 1.100 1.200 1.250 a The total regular production cost=5 The total subcontracting cost=5 Total cost with plan 5 5 (Enter your response as a whole number) (Enter your response as a whole number) (Enter your response as a whole number)
1,500 2.200 April The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January May February 1,500 June 2,300 March 1.700 July 1.700 1,800 August 1,700 Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand Stockout cost of lost sales is $100 per unit. Inventory holding cost is $25 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 $50 per unit. The cost of laying off workers is $80 per unit Evaluate this plan. (Enter a responses as whole numbers.) Note. Both hiring and layoff costs are incurred in the month of the change. For example, going from 1,600 in January to 1,500 in February incurs a cost of fayoff for 100 units in February Hire (Units) Layoff (Units) Ending Inventory 200 Stockouts (Units) Period Month 0 December 1 January 2 February 3 March 4 April 5 May 6 June 1 July 8 August Demand 1,600 1,500 1,500 1,700 1 800 2.200 2.300 1.700 1,700 Production 1,600 1.600 1,500 1,500 1.700 1.800 2,200 2,300 1.700 The total cost of hirings = $ (Enter your response as a whole number.) The total cost of layoffs = $ (Enter your response as a whole number) The total inventory carrying cost = 5 (Enter your response as a whole number.) The total stockout cost = $[ (Enter your response as a whole number) The total cost, excluding normal time labor costs, is = 5 (Enter your response as a whole number.)