Question: Consider the level production plan for Pennington Cabinets shown in
Consider the level production plan for Pennington Cabinets shown in Table 10.5. Perform a cash ﬂow analysis for this production plan, using the cash ﬂow analysis in Example 10.8 as a guide. Assume that each cabinet set sold generates a cash inflow of $2,800, while each unit produced using regular time generates a cash outﬂow of $2,000 and each cabinet set held in inventory at the end of the month generates a cash outﬂow of $40. How does this cash ﬂow compare with the one for the mixed strategy (Table 10.10)? Which plan do you think finance would prefer?
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