A manufacturer of solid state drives (SSDs) has projected the next six months of demand to be
Question:
Supply/Demand Info | Beginning | Jan | Feb | Mar | Apr | May | Jun |
Forecast (demand) | 48,000 | 52,000 | 60,000 | 54,000 | 58,000 | 64,000 | |
Regular production | |||||||
Overtime production | |||||||
Subcontract production | |||||||
Ending inventory | 6,000 | ||||||
Hired employees | |||||||
Fired employees | |||||||
Total employees | 200 |
Cost variables as as follows:
Cost Variables | |
Labor cost/hour | $13 |
Overtime cost/unit | $34 |
Subcontracting cost/unit | $29 |
Holding cost/unit/month | $9 |
Hiring cost/employee | $2,600 |
Firing cost/employee | $4,600 |
Here is some additional relevant (capacity) information:
Capacity Information | |
Total labor hours/SSD | 2 |
Regular production units/employee/month | 200 |
Max regular production/month | 56,000 |
Max overtime production/month | 4,000 |
Max subcontractor production/month | 5,000 |
Given the above information (and don't overlook beginning number of employees and inventory levels in the first table), create a level production plan with only the use of regular production and no inventory left over at the end of the six-month period.
What is the regular production cost (over the six months from January through June) for a level production plan? (Display your answer to the nearest whole number.)
What is the total overtime production cost for this production plan? (Display your answer to the nearest whole number.)
What is the total subcontract cost for this production plan? (Display your answer to the nearest whole number.)
What is the total holding cost for this production plan? (Display your answer to the nearest whole number.)
What is the total hire cost for this production plan? (Display your answer to the nearest whole number.)
What is the total fire cost for this production plan? (Display your answer to the nearest whole number.)
What is the total cost (sum of all costs) for this production plan? (Display your answer to the nearest whole number.)
Introduction to Derivatives and Risk Management
ISBN: 978-1305104969
10th edition
Authors: Don M. Chance