Question

The? S&OP team at Kansas? Furniture, has received estimates of demand requirements as shown in the table. Assuming? one-time stockout costs for lost sales of ?$125 per? unit, inventory carrying costs of ?$20 per unit per? month, and zero beginning and ending? inventory, evaluate these two plans on an incremental cost? basis: Plan? A: Produce at a steady rate? (equal to minimum? requirements) of 1 comma 000 units per month and subcontract additional units at a ?$70 per unit premium cost. Subcontracting capacity is limited to 800 units per month. ?(Enter all responses as whole numbers?). ????????????????????????????????????????????????????????????????????????????????????????????????????????????? Month Demand Production Ending Inventory Subcontract ? (Units) 1 July 1000 1 comma 000 0 nothing 2 August 1200 1 comma 000 0 nothing 3 September 1400 1 comma 000 0 nothing 4 October 1800 1 comma 000 0 nothing 5 November 1800 1 comma 000 0 nothing 6 December 1800 1 comma 000 0 nothing The total? cost, excluding normal time labor? costs, for Plan A? = ?$ nothing. ?(Enter your response as a whole? number.) Plan? B: Vary the workforce to produce the prior? month's demand. The firm produced 1 comma 300 units in June. The cost of hiring additional workers is ?$30 per unit produced. The cost of layoffs is ?$65 per unit cut back. ?(Enter all responses as whole? numbers.) ?Note: Both hiring and layoff costs are incurred in the month of the change? (i.e., going from production of 1 comma 300 in July to 1000 in August requires a layoff? (and related? costs) of 300 units in? August). Month Demand Production Hire ?(Units) Layoff ?(Units) Ending Inventory Stockouts ?(Units) 1 July 1000 nothing nothing nothing nothing nothing 2 August 1200 nothing nothing nothing nothing nothing 3 September 1400 nothing nothing nothing nothing nothing 4 October 1800 nothing nothing nothing nothing nothing 5 November 1800 nothing nothing nothing nothing nothing 6 December 1800 nothing nothing nothing nothing nothing The total hiring cost? = ?$ nothing. ?(Enter your response as a whole? number.) The total layoff cost? = ?$ nothing. ?(Enter your response as a whole? number.) The total inventory carrying cost? = ?$ nothing. ?(Enter your response as a whole? number.) The total stockout cost? = ?$ nothing. ?(Enter your response as a whole? number.) The total? cost, excluding normal time labor? costs, for Plan B? = ?$ nothing. ?(Enter your response as a whole? number.)

Answer 1

I tried my best to understand the question and answer it accordingly(some values may be different)