Given details: 1) Inventory carrying cost-5$/unit; 2) regular production cost-4$/unit; 3) hire cost-125/unit; 4) lay-off cost-...

  

Transcribed Image Text:

Given details: 1) Inventory carrying cost-5$/unit; 2) regular production cost-4$/unit; 3) hire cost-125/unit; 4) lay-off cost- 14$/unit; 5) Subcontractor cost is $50/unit As operations manager develop below Plans and calculate costs: a) Produce at a steady rate of 1,000 units per month and give left amount to subcontract. Initial stock-500 units. (2 points) Vary the workforce, to produce monthly demand by receiving and firing employees. Initial stock-0 units. (2 points) Produce at a steady rate of 1,100 units per month and you can fire employees per ending inventory if current month's total stock (produced amount + left from initial month) above demand as well as hire them if it is behind demand on this condition that you can hire new employees for only 300 units. If amount is more than 300 then give left amount to subcontractor. Initial stock-500 units. (4 points) d) Which is the best method to choose? (2 points) b) c) Victoria Ltd. has received the following estimates of demand requirements: July Aug. Sept. Oct. Nov. Dec. 1,500 800 1,400 1,800 1,600 1,300 Given details: 1) Inventory carrying cost-5$/unit; 2) regular production cost-4$/unit; 3) hire cost-125/unit; 4) lay-off cost- 14$/unit; 5) Subcontractor cost is $50/unit Given details: 1) Inventory carrying cost-5$/unit; 2) regular production cost-4$/unit; 3) hire cost-125/unit; 4) lay-off cost- 14$/unit; 5) Subcontractor cost is $50/unit As operations manager develop below Plans and calculate costs: a) Produce at a steady rate of 1,000 units per month and give left amount to subcontract. Initial stock-500 units. (2 points) Vary the workforce, to produce monthly demand by receiving and firing employees. Initial stock-0 units. (2 points) Produce at a steady rate of 1,100 units per month and you can fire employees per ending inventory if current month's total stock (produced amount + left from initial month) above demand as well as hire them if it is behind demand on this condition that you can hire new employees for only 300 units. If amount is more than 300 then give left amount to subcontractor. Initial stock-500 units. (4 points) d) Which is the best method to choose? (2 points) b) c) Victoria Ltd. has received the following estimates of demand requirements: July Aug. Sept. Oct. Nov. Dec. 1,500 800 1,400 1,800 1,600 1,300 Given details: 1) Inventory carrying cost-5$/unit; 2) regular production cost-4$/unit; 3) hire cost-125/unit; 4) lay-off cost- 14$/unit; 5) Subcontractor cost is $50/unit

Answer rating: 100% (QA)

SOLUTION a Plan A Produce at a steady rate of 1000 units per month and give left amount to subcontract Initial stock500 units For this plan the total production cost per unit would be 45 and the inven... View the full answer