ABC Wash, Inc., makes commercial and industrial laundry machines (the kinds hotels use), and has these...

 

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ABC Wash, Inc., makes commercial and industrial laundry machines (the kinds hotels use), and has these aggregate demand requirements for the next six months. The firm has regular capacity for 200 units, and overtime capacity of 40 units. Currently, subcontracting can supply up to 100 units per month, but the subcontracting firm may soon be unavailable. Demand for Month M1 is 220, M2 is 160, M3 is 200, M4 is 210, M5 is 200, and M6 is 190. Previous output level is 150 units and the beginning inventory is 100 units. Stockout cost $250 per unit $100 per unit at end Inventory holding cost of month Regular time cost $1,200 per unit Subcontracting cost $2,000 per unit Overtime cost $1,500 per unit Cost of increasing $200 per unit units Cost of decreasing $500 per unit units a. Produce utilizing a level strategy at 180 units in which the company incurs regular time production costs, inventory charges and any costs due to the change in the production level from the previous output level. What is the cost of this strategy? [Select] b. Which of the following actions is consistent with the use of level scheduling? [ Select] c. Produce utilizing a mixed strategy by producing 120 units every month. Then, utilize overtime (capacity 40), and subcontracting to meet demand. What is the cost of this strategy? [Select] ABC Wash, Inc., makes commercial and industrial laundry machines (the kinds hotels use), and has these aggregate demand requirements for the next six months. The firm has regular capacity for 200 units, and overtime capacity of 40 units. Currently, subcontracting can supply up to 100 units per month, but the subcontracting firm may soon be unavailable. Demand for Month M1 is 220, M2 is 160, M3 is 200, M4 is 210, M5 is 200, and M6 is 190. Previous output level is 150 units and the beginning inventory is 100 units. Stockout cost $250 per unit $100 per unit at end Inventory holding cost of month Regular time cost $1,200 per unit Subcontracting cost $2,000 per unit Overtime cost $1,500 per unit Cost of increasing $200 per unit units Cost of decreasing $500 per unit units a. Produce utilizing a level strategy at 180 units in which the company incurs regular time production costs, inventory charges and any costs due to the change in the production level from the previous output level. What is the cost of this strategy? [Select] b. Which of the following actions is consistent with the use of level scheduling? [ Select] c. Produce utilizing a mixed strategy by producing 120 units every month. Then, utilize overtime (capacity 40), and subcontracting to meet demand. What is the cost of this strategy? [Select]

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