2.9 A company wants to develop a level production plan. The beginning inventory is zero. Demand for the next four periods is given in what follows. a. What production rate per period will give a zero inventory at the end of period 4? b. When and in what quantities will back orders occur? c. What level production rate per period will avoid back orders? What will be the end- ing inventory in period 4? Period Forecast Demand Planned Production Planned Inventory 0 1 2 3 4 Total 9 5 9 9

1. Katherine is a forecast manager. She used exponential smoothing to forecast her sales with alpha equals 0.25. Her forecast for this week was 161 but the actual number is 232. What is her forecast for next week?2. Blue Pad Company’s lead time L is1week and demand rate is119units per week.Holding cost is $29 per unit and ordering cost is $281. Assume 52 weeks in a year.What is the EOQ? Keep two decimal points!3.Blue Pad Company’s lead time L is3week and demand rate is123units per week.Holding cost is $70 per unit and ordering cost is $726. Assume 52 weeks in a year.What is the ROP?4. Lugini Watch’s annual demand is 107. It can produce at a rate of 19 watches per month with a $249 setup cost for the production run. Find the order quantity (EPQ) assuming carrying cost is $57 per unit a year. Keep two decimal points!5. Lugini Watch’s annual demand is 108. It can produce at a rate of 24 watches per month. Using the…

7. Nowjuice, Inc., produces Shakewell fruit juice. A planner has developed an aggregate forecast for demand (in cases) for the next six months. Month May Jun Jul Forecast 4,000 4,800 5,600 Aug Sep 7,200 Oct 6,400 5,000 Use the following information to develop aggregate plans. Regular production cost Regular production capacity Overtime production cost Subcontracting cost Holding cost Beginning inventory $10 per case 5,000 cases $16 per case $20 per case $1 per case per month 0 Develop an aggregate plan using each of the following guidelines and compute the total cost for each plan. Which plan has the lowest total cost? a. Use level production. Supplement using overtime as needed. b. Use a combination of overtime (500 cases per period maximum), inventory, and subcontracting (500 cases per period maximum) to handle variations in demand. c. Use overtime up to 750 cases per period and inventory to handle variations in demand.

2. Perform an ABC analysis for the data provided. Clearly explain why you classified items as A, B, or C. Annual Unit Item Usage 2400 Cost $19.51 $32.60 $10.20 $6.80 2 6200 3 8500 4 3200 6000 $4.50 $55.70 $3.60 $44.90 $35.62 750 7 8200 8 9000 5800 10 820 $82.60 $40.50 11 500 12 2000 $15.40 $14.60 $35.80 13 2400 14 6300 15 4750 $17.30 2700 $51.75 $42.90 $25.30 16 17 1600 18 1350 19 5000 $67.00 20 1000 $125.00