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, inventorycarrying costs of $20 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis:Plan B: Vary the workforce to produce the prior month's demand. The firm produced 1,300 units in June. The cost of hiring additional workers is $30 per unit produced. The cost of layoffsis $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 1,300 in July to 1200 in August requires a layoff (and related costs) of 100 units inAugust).EndingInventoryHireLayoff(Units)StockoutsMonthDemandProduction(Units)(Units)1 July12002 August13003 September12004October1700November16506.December1650

Loss of revenue and customers as a result of a stockout include stockout charges. This is especially…

Answered: carrying costs of $20 per unit per…

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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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 the following plan on an incremental cost basis: Plan B: Vary the workforce to produce the prior month's demand. The firm produced 1,300 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 1,300 in July to 1200 in August requires a layoff (and related costs) of 100 units in August). Layoff (Units) Ending Inventory Hire Stockouts Month Demand Production (Units) (Units) 1 July 1200 2 August 1300 3 September 1200 4 October 1700 5 November 1650 6. December 1650
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 $100 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 B: Vary the workforce to produce the prior month's demand. The firm produced 1,300 units in June. The cost of hiring additional workers is $35 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 1,300 in July to 1000 in August requires a layoff (and related costs) of 300 units in August). A) see image B)The total cost, excluding normal time labor costs, for Plan B = C)The total stockout cost =
The S&OP team at Kansas Furniture, led by David Angelow, 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 $25 per unit per month, and zero beginning and ending inventory, evaluate the following plan on an incremental cost basis: Plan B: Vary the workforce to produce the prior month's demand. Demand was 1,300 units in June. The cost of hiring additional workers is $30 per unit produced. The cost of layoffs is $60 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 1,300 in July to 1300 in August requires a layoff (and related costs) of 0 units in August). Month Hire Demand Production (Units) Layoff Ending (Units) Inventory Stockouts (Units) 1 July 1300 2 August 1150 3 September 1100 4 October 1600 5 November 1900 6 December 1900
Points: 0 of 1 Save The S&OP team at Kansas Furniture, has received estimates of demand requiroments as shown in the table. Assuming one-time stockout costs for lost sales of $100 per unit, inventory carrying costs of $25 per unit per month, and zero beginning and ending inventory evaluate the following plan on an incremental cost basis Plan A: Produce at a steady rate (equal to minimum requirements) of 1,200 units per month and subcontract additional units at a $60 per unit premium cost Subcontracting capacity is limited to 500 units per month (Entor all responses as whole numbers) ETIT Ending Production Inventory 1,200 Subcontract Month 1 July 2 August 3 September Demand 1200 (Units) 1300 1,200 1200 1,200 October 1700 1,200 1,200 5 November 6 December 1650 1400 1,200
Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the production planner, has assembled the following cost data and demand forecast: demand forecast. Quarter Forecast 1 1,900 2 1,200 3 1,600 4 800 Costs/Other Data Previous quarter's output=1,200 cases Beginning inventory=0 cases Stockout cost of backorders=$160 per case Inventory holding cost=$40 per case at end of quarter Hiring employees=$35 per case Terminating employees=$80 per case Subcontracting cost=$65 per case Unit cost on regular time=$30 per case Overtime cost=$20 extra per case Capacity on regular time=1,900 cases per quarter John's job is to develop an aggregate plan. The three initial options he wants to evaluate are: • Plan A: a strategy that hires and fires personnel as necessary to meet the forecast. • Plan B: a level strategy. • Plan C: a level strategy that…
The total cost, excluding normal time labor costs, for Plan A = $. (Enter your response as a whole number.) Plan B: Vary the workforce to produce the prior month's demand. Demand was 1,300 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 1,300 in July to 1000 in August requires a layoff (and related costs) of 300 units in August). Month 1 2 3 September 4 October July August 5 November 6 December Demand 1000 1200 1400 1800 1800 1800 Hire Production (Units) The total hiring cost = $ The total layoff cost = $ The total inventory carrying The total stockout cost = $ The total cost, excluding normal time labor costs, for Plan B = (Enter your response as a whole number.) (Enter your response as a whole number.) cost = $ (Enter your response as a whole number.) Layoff…
3) AGGREGATE PLANNING Mark Tuan, Operations Manager at GOT7 Furniture, has received the following estimates of demand requirements: January 1,100 February 1,200 March 1,400 April 1,800 May 1,800 June 1,600 Assuming stockout costs for lost sales of RM100 per unit, inventory carrying costs of RM25 per unit per month, and a zero beginning and ending inventory. Analyze the extra cost if the company vary the workforce, which performs at a current production level of 1,300 units per month. The cost of hiring additional workers is RM3,000 per 100 units produced. The cost of layoffs is RM6,000 per 100 units cut back.
The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: alculator DEPREFERESSESES Cara be 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 $65 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-time costs Evaluate the following plan. This exercise contains only Plan E. Plan E: Keep the current workforce, which is producing 1,600 units per month, and subcontract to meet the rest of the demand. Subcontract cost is $75 per unit. mummill M Pla $100433443 January February March April MESS Month 0 December 1 January 2 February 3 March 4 April 5 May 6 June 7 July 8 August Ask my instructor 1,400 1,600 1,800 1,800 Demand 1.400 1,600 1,800 1,800 2,200 2,100 1,800 1.400 May June July August Production (Units) 1,600 1,600 1,600 1,600 1,600 1,600 1,600 1,600 2,200 2.100 1.800 1,400 S Plan E Subcontract…
EZ-Windows, Inc. manufacturers replacement windows for the home remodeling business. In January, the company produces 15,000 windows and ended the month with 9,000 windows in inventory. EZ-Windows' management team would like to develop a production schedule for the next three months. A smooth production schedule is obviously desirable because it maintains the current workforce and provides a similar month-to-month operation. However, given the sales forecasts, the productioncapacities, and the storage capabilities as shown in Table 2, the management team does not think a smooth production schedule with the same production quantity each month possible.The company's cost accounting department estimates that increasing production by one window from one month to the next will increase total costs by $1.00 for each unit increase in the production level. In addition, decreasing production by one unit from one month to the next will increase total costs by $0.65 for each unit decrease in the…
Prepare a master production schedule with the information given as follows. The forecast for each week of am eight week schedule is 50 units. The MPS rule is to schedule production if the projected on hand inventory would be negative without it. Customer orders are as follows. Production lot size is 75, safety stock is 10 and no beginning on hand inventory. Calculate available to promise (ATP) quantity for each period. Week Customer Orders 1 52 2 35 3 20 4 12 Period Forecast Cust.Ord. SS Proj. OH MPS ATP
The XYZ company has two plants producing "K Specials". It has the following expected data for the next month's operations. Variable (incremental) costs vary linearly from zero production to maximum capacity production. plant A plant B Max. Capacity, units 1,000 800 Total fixed cost 750,000 480,000 Variable (incremental) Costs Max. Capacity 900,000 800,000 Performance has not been good, so the company expects to receive domestic orders for only 1,200 units next month at a price of 1,400 per unit. How should the production be distributed between the plants for optimum economic operation? A. Plant A should produce 800 units and 400 units for Plant B. B. Plant A should produce 1,000 units and 200 units for Plant B. C. Plant A should produce 700 units and 500 units for Plant B. D. Plant A should produce 900 units and 300 units for Plant B.
a) GOT7 Soda Pop, Inc., has a new fruits drink. The production planner has assembled the following cost data and demand forecast as follow: [GOT7 Soda Pop, Inc., mempunyai minuman buah-buahan yang baru, Perancang pengeluaran telah mengumpul data tentang kos dan ramalan permintaan seperti berikut:] Quarter Demand 1,800 First Second 1,200 Third 1,600 Fourth 1,300 Table 1: Cost and demand forecast [Jadual 1: Kos dan ramalan permintaan] Previous quater's output 1,300 cases Beginning inventory 0 cases Stockout cost Inventory holding cost Hiring employees Terminating employees Subcontracting cost Unit cost on regular time Overtime cost RM150 RM40 per case at the end of quater RM40 per case RM80 per case RM60 per case RM30 per case RM15 extra per case You as the production planner need to develop an aggregate planning. You are required to: [Anda sebagai perancang pengeluaran perlu membangunkan perancangan agregat Anda dikehendaki untuk:] i) Assess plan A: strategy that hires and fires…

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