4. Mike Blanford, master scheduler at General Avionics, has the following demand forecast for one line...
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4. Mike Blanford, master scheduler at General Avionics, has the following demand forecast for one line in his factory: Quarter 1 2 3 4 Unit Sales 2,500 2,700 1,600 4,500 Regular production available: 2000 units per period Regular production cost: $20 per unit Under-time production cost: $15 per unit Overtime production cost: $30 per unit Inventory costs: $4 per unit per period Backorder costs: $25 per unit per period Beginning inventory: 500 units (Compute your inventory costs based on average inventory) a. The CEO at General Avionics has a problem with production plan. He is not happy with having back order in any sales and operations plan. He asks you to develop a plan that requires no back order, no ending inventory and produces exactly enough to meet demand (chase production plan). Overtimes are allowed. b. After you introduce your production plan to the CEO, he tells you that this plan cost too much. Therefore, he asks you to increase the regular production available from 2000 to 2500 and use subcontract instead of overtime. Should you develop a production plan as suggested by the CEO? Why? Assume subcontract cost is $35 per unit. c. Based on question b, what should the maximum price for subcontract per unit be so as to use the plan in question b? 4. Mike Blanford, master scheduler at General Avionics, has the following demand forecast for one line in his factory: Quarter 1 2 3 4 Unit Sales 2,500 2,700 1,600 4,500 Regular production available: 2000 units per period Regular production cost: $20 per unit Under-time production cost: $15 per unit Overtime production cost: $30 per unit Inventory costs: $4 per unit per period Backorder costs: $25 per unit per period Beginning inventory: 500 units (Compute your inventory costs based on average inventory) a. The CEO at General Avionics has a problem with production plan. He is not happy with having back order in any sales and operations plan. He asks you to develop a plan that requires no back order, no ending inventory and produces exactly enough to meet demand (chase production plan). Overtimes are allowed. b. After you introduce your production plan to the CEO, he tells you that this plan cost too much. Therefore, he asks you to increase the regular production available from 2000 to 2500 and use subcontract instead of overtime. Should you develop a production plan as suggested by the CEO? Why? Assume subcontract cost is $35 per unit. c. Based on question b, what should the maximum price for subcontract per unit be so as to use the plan in question b?
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B Chase Strategy Quarters 1 2 3 4 Total Plan cost A Demand units 2500 2700 1600 4500 11300 B Production Requnits 2000 2700 1600 4500 C Inputs D Reg Pr... View the full answer
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