Question

# The president of Hill? Enterprises, Terri? Hill, projects the? firm's aggregate demand requirements over the next...

The president of Hill? Enterprises, Terri? Hill, projects the? firm's aggregate demand requirements over the next 8 months as? follows:

 January 1,500 May February 1,700 June 2,200 March 1,600 July 1,700 April 1,900 August 1,700

Her operations manager is considering a new? plan, which begins in January with

200 units of inventory on hand. Stockout cost of lost sales is ?\$100per unit. Inventory holding cost is

?\$20 per unit per month. Ignore any? idle-time costs. The plan is called plan A

Plan? A: Vary the workforce level to execute a strategy that produces the quantity demanded in the prior month. The December demand and rate of production are both 1,600 units per month. The cost of hiring additional workers is ?\$50 per unit. The cost of laying off workers is \$80 per unit. Evaluate this plan.

?(Enter all responses as whole numbers?.)

?Note: Both hiring and layoff costs are incurred in the month of the change. For? example, going from

1,600 in January to 1,500 in February incurs a cost of layoff for 100 units in February.

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 Period Month Demand Production Hire ?(Units) Layoff ?(Units) Ending Inventory Stockouts ?(Units) 0 December 1,600 1,600 200 1 January 1,500 1,6000 nothing nothing nothing 2 February 1,700 1,500 nothing nothing nothing 3 March 1,600 1,700 nothing nothing nothing 4 April 1,900 1,600 nothing nothing nothing 5 May 2,300 1,900 nothing nothing nothing 6 June 2,200 2,300 nothing nothing nothing 7 July 1,700 2,200 nothing nothing nothing 8 August 1,700 1,700 nothing nothing nothing

Formula:

D4 =C3

E4 =MAX(0,D4-D3)

F4 =MAX(0,D3-D4)

G4 =MAX(0,G3+D4-C4-H3)

H4 =MAX(0,-G3-D4+C4+H3)

copy these formulas down to row 11

H15 =E12*E13

H16 =F12*F13

H17 =G12*G13

H18 =H12*H13

H19 =SUM(H15:H18)

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