The company Plaisir d't manufactures an assortment of products for the practice of recreation and leisure. The
Question:
The company "Plaisir d'été" manufactures an assortment of products for the practice of recreation and leisure. The total demand for the next seven months is as follows:
Month | March | April | May | June | July | August | September |
forecasts | 50 | 44 | 55 | 60 | 60 | 40 | 50 |
Use the following information to develop aggregate production schedules.
Regular production cost: $240 per unit
Overtime production cost: $360 per unit
Regular capacity: 40 units per month
Overtime capacity: 8 units per month
Cost of subcontracting: $420 per unit
Subcontracting capacity: 12 units per month
Backorder cost: $100 per unit per month
Initial stocks: 0 units
Ending stocks in September: 0 units
Storage cost: $30 per unit per month (monthly inventory cost is calculated on
basis of the final inventory of the month).
Number of employees: 5 workers
Hiring cost: $2000 per employee
Thank you cost: $1000 per employee
Please do an overall production plan using each of the following guidelines and calculate the total cost of each program. Although backorders are permitted, any the demand forecast must be satisfied at the end of September.
a) With 5 workers, use regular production. If insufficient, complete using overtime and finally, subcontracting as needed. Orders are not allowed, nor the variation of the work. Calculate the cost of this plan.
Intermediate Financial Management
ISBN: 978-1111530266
11th edition
Authors: Eugene F. Brigham, Phillip R. Daves