Mary Rhodes (Problem 13.9) is considering two more mixed strategies. Using the data in Problem 13.9 compare
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Plan C: Keep the current workforce steady at a level producing 1,300 units per month. Subcontract the remainder to meet demand. Assume that 300 units remaining from June are available in July.
Plan D: Keep the current workforce at a level capable of producing 1,300 units per month. Permit a maximum of 20 % overtime at a premium of $40 per unit. Assume that warehouse limitations permit no more than a 180-unit carryover from month to month. This plan means that any time inventories reach 180, the plant is kept idle. Idle time per unit is $60. Any additional needs are subcontracted at a cost of $60 per incremental unit.
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a Plan C Period Demand Production Units Subcont Units Ending Inv Extra Cost Jun 300 Jul 1000 1300 60...View the full answer
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