Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Can you say if it is better to carry inventory or create back orders? Discuss the pros and cons of each
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- The table below provides the aggregate plan of production by a firm. It is known that the firm uses a chase plan. The firm’s labor cost is $10/unit, hiring cost is $200 per unit of increase, and unit firing cost is $400 per unit of decrease in production. Given this information, what is the number in the cell with the question mark?arrow_forward7 SCMarrow_forwardevelop a production plan and calculate the annual cost for a firm whose demand forecast is fall, 9,700; winter, 8,000; spring, 7,000; summer, 11,700. Inventory at the beginning of fall is 485 units. At the beginning of fall you currently have 35 workers, but you plan to hire temporary workers at the beginning of summer and lay them off at the end of summer. In addition, you have negotiated with the union an option to use the regular workforce on overtime during winter or spring only if overtime is necessary to prevent stockouts at the end of those quarters. Overtime is not available during the fall. Relevant costs are hiring, $80 for each temp; layoff, $160 for each worker laid off; inventory holding, $5 per unit-quarter; backorder, $10 per unit; straight time, $5 per hour; overtime, $8 per hour. Assume that the productivity is 0.5 unit per worker hour, with eight hours per day and 60 days per season. In each quarter, produce to the full output of your regular workforce, even if that…arrow_forward
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