The Westerbeck Company manufactures several models of automatic washers and dryers. The projected requirements over the next year for their washers are shown in the table below: Month & Requirement January - 710 February - 1090 March - 880 April - 690 May - 1400 June - 1130 July - 1550 August - 1020 September - 530 October - 390 November - 980 December - 1210 Current inventory is 140 units. Current capacity is 1,030 units per month. The average salary of production workers is $1,150 per month. Material costs $140/unit. Each production worker accounts for 35 units per month. Overtime is paid at time and a half. Any increase or decrease in the production rate costs $40/unit for tooling, setup, and line changes. This does not apply, however, to overtime. Inventory-holding costs are $30 per unit per month. Lost sales are valued at $70 per unit. Compare the costs of level and chase demand production plans using the Agg Plan – Level and Agg Plan – Chase Excel templates. Round all your answers for cost values to the nearest cent and all other answers to the nearest whole number. Do not round intermediate calculations. If your answer is zero, enter "0".
The Westerbeck Company manufactures several models of automatic washers and dryers. The projected requirements over the next year for their washers are shown in the table below:
Month & Requirement
January - 710 February - 1090 March - 880 April - 690 May - 1400 June - 1130
July - 1550 August - 1020 September - 530 October - 390 November - 980 December - 1210
Current inventory is 140 units. Current capacity is 1,030 units per month. The average salary of production workers is $1,150 per month. Material costs $140/unit. Each production worker accounts for 35 units per month. Overtime is paid at time and a half. Any increase or decrease in the production rate costs $40/unit for tooling, setup, and line changes. This does not apply, however, to overtime. Inventory-holding costs are $30 per unit per month. Lost sales are valued at $70 per unit. Compare the costs of level and chase demand production plans using the Agg Plan – Level and Agg Plan – Chase Excel templates. Round all your answers for cost values to the nearest cent and all other answers to the nearest whole number. Do not round intermediate calculations. If your answer is zero, enter "0".
For the level strategy, compare the normal production rate of 1,030 units per month with the average monthly demand rounded to a whole number. Round all your answers for cost values to the nearest cent and all other answers to the nearest whole number. Do not round intermediate calculations. If your answer is zero, enter "0".
Level production plan with the average monthly demand rounded to a whole number:
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