Q1) Evaluate each plan and find out which one is better in terms of total costs - Plan 1: for the manufacturer is to mai

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Q1 Evaluate Each Plan And Find Out Which One Is Better In Terms Of Total Costs Plan 1 For The Manufacturer Is To Mai 1 (169.24 KiB) Viewed 71 times

Q1) Evaluate each plan and find out
which one is better in terms of total costs
- Plan 1: for the manufacturer
is to maintain a constant workforce throughout the 6-month period.
we assume that the production per day is average requirements (
average production per day) and that we have a constant workforce,
no overtime or idle time, no safety stock, and no subcontractors.
The firm accumulates inventory during the slack period of demand,
January through March, and depletes it during the higher-demand
warm season, April through June. We assume beginning inventory = 0
and planned ending inventory = 0.
- Plan 2: is to maintain a constant
workforce at a level necessary to meet the lowest demand month (
February ) and to meet all demand above this level by
subcontracting.
Q1) Evaluate each plan and find out which one is better in terms of total costs - Plan 1: for the manufacturer is to maintain a constant workforce throughout the 6-month period. we assume that the production per day is average requirements ( average production per day) and that we have a constant workforce, no overtime or idle time, no safety stock, and no subcontractors. The firm accumulates inventory during the slack period of demand, January through March, and depletes it during the higher-demand warm season, April through June. We assume beginning inventory = 0 and planned ending inventory = 0. - - Plan 2: is to maintain a constant workforce at a level necessary to meet the lowest demand month ( February ) and to meet all demand above this level by subcontracting Please use the following information : Costs table: Inventory carrying cost $ 3 per unit per month Subcontracting cost per unit $17 per unit Average pay rate $10 per hour ($80 per day - 8 working hours per day) Labor-hours to produce a unit 4 hours per unit

Monthly forecasts: . T Month Jan Expected Demand 800 Production Days 16 Feb 600 800 Mar Apr May Jun 1,250 1,350 1,500 20 20 25 25 20