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Zebra Technologies Corporation (ZTC) manufactures a number of navigation packages for pleasure boats. Their plant in Alabama wants to try a fixed production schedule for the next 6 months. When regular-time production and inventory cannot meet demand, they plan on first using overtime, and if that is insufficient, they will subcontract out in order to meet demand. The forecast for the next 6 months and key production data are provided below. Feb Mar May Jan Jun Demand 700 600 400 650 850 1.000 Production Rate Production Cost Backorder Cost Overtime Cost Overtime Limit Employees Subcontracting Cost Subcontracting Limit Average Inventory Cost Initial Inventory 65 units/month/employee 10 $200/unit $100/units $175/unit $150/unit 100 units 200 units maximum $20/unit/month 100 units What would be the total cost of this plan? Question 2 If management at ZTC is interested in a chase strategy using a hire/fire option, what is the total cost of this plan? They plan on using a policy where if the need were for 21.2 workers, they would hire 22 workers for that quarter. (Hint: this will impact regular time production and inventory.)

Zebra Technologies Corporation (ZTC) manufactures a number of navigation packages for pleasure boats. Their plant in Alabama wants to try a fixed production schedule for the next 6 months. When regular-time production and inventory cannot meet demand, they plan on first using overtime, and if that is insufficient, they will subcontract out in order to meet demand. The forecast for the next 6 months and key production data are provided below. Feb Mar May Jan Jun Demand 700 600 400 650 850 1.000 Production Rate Production Cost Backorder Cost Overtime Cost Overtime Limit Employees Subcontracting Cost Subcontracting Limit Average Inventory Cost Initial Inventory 65 units/month/employee 10 $200/unit $100/units $175/unit $150/unit 100 units 200 units maximum $20/unit/month 100 units What would be the total cost of this plan? Question 2 If management at ZTC is interested in a chase strategy using a hire/fire option, what is the total cost of this plan? They plan on using a policy where if the need were for 21.2 workers, they would hire 22 workers for that quarter. (Hint: this will impact regular time production and inventory.)

Practical Management Science
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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Zebra Technologies Corporation (ZTC) manufactures a number of navigation packages for pleasure boats. Their plant in Alabama wants to try a fixed production schedule for the next 6 months. When regular-time production and inventory cannot meet demand, they plan on first using overtime, and if that is insufficient, they will subcontract out in order to meet demand. The forecast for the next 6 months and key production data are provided below. Jan Feb Mar Apr Мay Jun Demand 700 600 400 650 850 1,000 Employees Subcontracting Cost Subcontracting Limit Average Inventory Cost Initial Inventory Production Rate 65 units/month/employee 10 Production Cost $100/units $200/unit Backorder Cost $175/unit 200 units maximum Overtime Cost $150/unit $20/unit/month Overtime Limit 100 units 100 units What would be the total cost of this plan? Question 2 If management at ZTC is interested in a chase strategy using a hire/fire option, what is the total cost of this plan? They plan on using a policy where if the need were for 21.2 workers, they would hire 22 workers for that quarter. (Hint: this will impact regular time production and inventory.)
Transcribed Image Text:Zebra Technologies Corporation (ZTC) manufactures a number of navigation packages for pleasure boats. Their plant in Alabama wants to try a fixed production schedule for the next 6 months. When regular-time production and inventory cannot meet demand, they plan on first using overtime, and if that is insufficient, they will subcontract out in order to meet demand. The forecast for the next 6 months and key production data are provided below. Jan Feb Mar Apr Мay Jun Demand 700 600 400 650 850 1,000 Employees Subcontracting Cost Subcontracting Limit Average Inventory Cost Initial Inventory Production Rate 65 units/month/employee 10 Production Cost $100/units $200/unit Backorder Cost $175/unit 200 units maximum Overtime Cost $150/unit $20/unit/month Overtime Limit 100 units 100 units What would be the total cost of this plan? Question 2 If management at ZTC is interested in a chase strategy using a hire/fire option, what is the total cost of this plan? They plan on using a policy where if the need were for 21.2 workers, they would hire 22 workers for that quarter. (Hint: this will impact regular time production and inventory.)
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