The S&OP team at Kansas Fumiture, has received estimates of demand requirements as shown in the...
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The S&OP team at Kansas Fumiture, 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 A: Produce at a steady rate (equal to minimum requirements) of 1.000 units per month and subcontract additional units at a S60 per unit premium cost Subcontracting capacity is limited to 800 units per month. (Enter all responses as whole numbers) Ending Subcontract Demand Production Inventory 1,000 Month (Units) 1 July 2 August 1000 1200 1,000 3 September 1400 1,000 4 October 1800 1,000 1800 5 November 6 December 1,000 1800 1,000 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. The firm produced 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 (.e. going from produetion of 1,300 in July to 1000 in August requires a layoff (and related costs) of 300 units in August). 直TT Layoff (Units) Ending Inventory Stockouts (Units) Hire Month Demand 1000 Production (Units) 1 July 2 August 3 September 1200 1400 4 October 1800 5 November 6 December 1800 1800 The total hiring cost = $ (Enter your response as a whole number.) The total layoff cost = $ (Enter your response as a whole number.) The total inventory carrying cost = s (Enter your response as a whole number.) The total stockout cost = S (Enter your response as a whole number.) The total cost, excluding normal time labor costs, for Plan B = $ (Enter your response as a whole number.) The S&OP team at Kansas Fumiture, 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 A: Produce at a steady rate (equal to minimum requirements) of 1.000 units per month and subcontract additional units at a S60 per unit premium cost Subcontracting capacity is limited to 800 units per month. (Enter all responses as whole numbers) Ending Subcontract Demand Production Inventory 1,000 Month (Units) 1 July 2 August 1000 1200 1,000 3 September 1400 1,000 4 October 1800 1,000 1800 5 November 6 December 1,000 1800 1,000 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. The firm produced 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 (.e. going from produetion of 1,300 in July to 1000 in August requires a layoff (and related costs) of 300 units in August). 直TT Layoff (Units) Ending Inventory Stockouts (Units) Hire Month Demand 1000 Production (Units) 1 July 2 August 3 September 1200 1400 4 October 1800 5 November 6 December 1800 1800 The total hiring cost = $ (Enter your response as a whole number.) The total layoff cost = $ (Enter your response as a whole number.) The total inventory carrying cost = s (Enter your response as a whole number.) The total stockout cost = S (Enter your response as a whole number.) The total cost, excluding normal time labor costs, for Plan B = $ (Enter your response as a whole number.)
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Related Book For
Accounting
ISBN: 978-1285743615
26th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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