Plan production for a four-month period: February through May. For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers needed for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are 100 workers on January 31. You are given the following demand forecast: February, 90,000; March 65,000; April 110,000; May, 55,000. Productivity is four units per worker hour, eight hours per day, 20 days per month. Assume zero inventory on February 1. Costs are hiring, $50 per new worker; layoff, $70 per worker laid off; inventory holding, $10 per unit-month; straight-time labor, $10 per hour; overtime, $15 per hour; backorder, $20 per unit a. Find the total cost of this plan? Relevant information includes:Backorder cost per unitHolding cost per unitNumber of workers at the end ofܢܢܫܒܢܢܩܒܠHiring cost per workerLayoff cost per workerProduction time (hours) per unitStraight time labor cost per hourOvertime labor cost per hourWorking time (hrs/day)Work days per monthBeginning inventoryTotal production (Production hoursrequired Production time per unit)Ending Inventory (Beginning inventory+ Actual production - Demand forecast)Ending backordersWorkers hiredWorkers laid offStraight Time (Production hrs available xStraight time labor cost)OvertimeInventory costBackorder cost$20.00$10.00100$50.00$70.000.25Hiring costLayoff costTotal costs$10.00$15.008.00Aggregate Production Planning RequirementsTime PeriodForecastBeginning InventoryProduction Required (Forecast -Beginning inventory)Production hours required (# unitsProduction Time per unit)Regular workforceRegular production (Production hrsavailable Labor hrs required per unit)Overtime hoursOvertime production20.000February MarchAprilTotal CostMay

Costs are hiring = 50Layoff = 70Inventory holding = 10Straight-time labor = 10Overtime = 15Backorder…

Plan production for a four-month period: February through May. For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers needed for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are 100 workers on January 31. You are given the following demand forecast: February, 90,000; March 65,000; April 110,000; May, 55,000. Productivity is four units per worker hour, eight hours per day, 20 days per month. Assume zero inventory on February 1. Costs are hiring, $50 per new worker; layoff, $70 per worker laid off; inventory holding, $10 per unit-month; straight-time labor, $10 per hour; overtime, $15 per hour; backorder, $20 per unit a. Find the total cost of this plan?

Plan production for a four-month period: February through May. For February and March, you should produce to exact demand forecast. For April and May, you should use overtime and inventory with a stable workforce; stable means that the number of workers needed for March will be held constant through May. However, government constraints put a maximum of 5,000 hours of overtime labor per month in April and May (zero overtime in February and March). If demand exceeds supply, then backorders occur. There are 100 workers on January 31. You are given the following demand forecast: February, 90,000; March 65,000; April 110,000; May, 55,000. Productivity is four units per worker hour, eight hours per day, 20 days per month. Assume zero inventory on February 1. Costs are hiring, $50 per new worker; layoff, $70 per worker laid off; inventory holding, $10 per unit-month; straight-time labor, $10 per hour; overtime, $15 per hour; backorder, $20 per unit a. Find the total cost of this plan?

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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a) b) C) d) Suppose we wish to set up a production plan for the JC Company for the next six months. We are given the following information: Number of working days Demand forecast Beginning Inventory Workforce size Labor hours required per unit: Safety stock: Straight-time cost per hour (first 8 hrs) Overtime cost per hour Inventory holding cost (unit/month) Jan 22 2000 157,000 156,000 155,000 158,000 Feb March April 19 21 21 1800 1200 1100 0 30 5 25% of the demand forecast $3,00 $5,00 $1,00 May 22 1100 June 20 1400 JC Company is planning to produce using a constant workforce (given above) on regular time and they will use overtime to meet additional output requirements. Calculate the total cost of this plan.
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Last Year Sales $208,000 $221,000 Cost of goods sold 106,000 116,000 Gross margin 102,000 105,000 Other expenses 49,000 49,000 Net income 53,000 56,000 Finished goods inventory 2,700 5,000 Work-in-process inventory 11,000 8,000 Raw material inventory 5,500 7,000 Total inventory (average for year) 19,200 20,000 Other current assets 93,000 109,000 Other assets 210,000 249,000 Total assets 322,200 378,000 ^THIS YEAR The plant manager, Murat Kristal, at York Technologies makes Aircraft Navigation Systems. He expects you, as the new OM analyst, to provide some insight for performance of the plant. High on his list is an understanding of his inventory…
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Month# Jan Feb Mar Apr May June Forecast# 1800 1500 1100 1500 2100 1600 Name Labor hours per unit (hr/unit) Initial number of workers Safety Stock (units) Working hours in a day(hr/day) Beginning inventory(units) Value 5 30 0 9 450 Month# Jan Feb Mar Apr May June Working Days available 21 21 21 21 21 19 The tables present forecasts, production, and cost information for aggregate planning. Using a level strategy with backorders to produce at average demand, now many workers are required each month? (Round up the calculated number of workers to the nearest whole number, and round the production rate to the nearest whole number
Costs Holding cost $8/ refrigerator/ month Subcontracting $80/ refrigerator Regular-time labor $12/ hour Overtime labor $18/ hour for hours above 8 hours/ worker/ day Hiring cost $40/ refrigerator Layoff cost $80/ refrigerator Stockout cost none Other Data Current workforce (December) 8 people Labor hours/ refrigerator 4 hours Workdays/ month 20 days Beginning inventory 250 refrigerators Units demanded in December 320 refrigerators Month Demand Forecast January 400 February 500 March 550 April 700 May 800 June 700
1. Rapid-Lube provides oil changes and lubes. The estimated number of oil changes for April and May are 3,600 and 4,000. Each oil change takes 12 minutes of direct labor. The wage rate is $10 per hour. Overhead is $3,700 per month and $2 per oil change. Budgeted overhead for May is $__________________. Budgeted overhead for April is $__________________. Budgeted direct labor for May is $__________________. Budgeted direct labor for April is $__________________. 2. You have decided to throw a party next weekend for 20 friends. The friends are going to bring health food, so all you have to have available are the drinks. You estimate that, on average, each person will drink four bottles of soft drinks. Three of your friends will drink only natural soda without unneeded color  so Sulo Ginger Ale should work well for them. For the others, you decide to buy Sulo Cola. Before going online, you check the refrigerator  you already have six bottles of Sulo Ginger Ale and 14 of Sulo Cola.…
19 Customer segmentation and revenue management are important factors in demand flow strategy. Select one: a. False b. True
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