a. How much should Joan produce each month if she wishes to have a level operations plan with no back orders or stockouts? Plot your cumulative production on the preceding graph. b. What is ending inventory for month 4 under this plan? c. Joan decides to have a level-production, level-employment sales and operations plan with no ending inventory at the end of the planning horizon. How much should she make each month? What are the monthly back orders?

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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10. Below is the plotted cumulative demand for Joan's Joyous Nature Food (in pounds) for the next
four months. Beginning inventory is 10 pounds.
Month
1234
Demand
120
160
20
70
Transcribed Image Text:10. Below is the plotted cumulative demand for Joan's Joyous Nature Food (in pounds) for the next four months. Beginning inventory is 10 pounds. Month 1234 Demand 120 160 20 70
600
500
400
300
200
100
0
2
Month
3
Cumulative
demand
Problems 117
a. How much should Joan produce each month if she wishes to have a level operations plan
with no back orders or stockouts? Plot your cumulative production on the preceding
graph.
b. What is ending inventory for month 4 under this plan?
c. Joan decides to have a level-production, level-employment sales and operations plan with no
ending inventory at the end of the planning horizon. How much should she make each month?
What are the monthly back orders?
d. Given inventory carrying costs of $5/pound/month (based on the average inventory) and back
orders of $8/pound/month (based on month-end back orders), calculate the cost of back
orders and inventory for the plan in part c.
Transcribed Image Text:600 500 400 300 200 100 0 2 Month 3 Cumulative demand Problems 117 a. How much should Joan produce each month if she wishes to have a level operations plan with no back orders or stockouts? Plot your cumulative production on the preceding graph. b. What is ending inventory for month 4 under this plan? c. Joan decides to have a level-production, level-employment sales and operations plan with no ending inventory at the end of the planning horizon. How much should she make each month? What are the monthly back orders? d. Given inventory carrying costs of $5/pound/month (based on the average inventory) and back orders of $8/pound/month (based on month-end back orders), calculate the cost of back orders and inventory for the plan in part c.
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