Question

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

Answer 1

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)