Event Description: ABC company, which produces radiator thermostats, faces costs and production information. At the beginning of
Question:
Event Description: ABC company, which produces radiator thermostats, faces costs and production information. At the beginning of January, the company had 10,000 units in stock, and it is desired to have 2,000 units in stock at the end of the year. At the beginning of January, the company has 300 employees. Each employee works 20 days a month, 8 hours a day. The monthly overtime work for an employee cannot exceed 20 hours. Additionally, according to the mutual agreement with the outsourcing producer, the company must carry out a minimum of 500 units of production through outsourcing every month. The quantity of outsourced production in any month is limited to 5,000 units. Furthermore, according to the company's strategy, no more than 30 employees can be hired or fired in any month.
The managers of the company with a fluctuating demand structure anticipate a 5% discount in the low-demand month of August. As a result of this discount, it is expected that sales in the current month will increase by 50%, and 30% of the demand from the next four months will be shifted to August. In this case, what will be the company's profit?
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen