Question: ABC Trailers assembles different types of small camping trailers demanded between January and June of each year. The demand generally peaks in April and May.
ABC Trailers assembles different types of small camping trailers demanded between January and June
of each year. The demand generally peaks in April and May. Next year's aggregate demand forecast
beyond the regular capacity is given in the following table:
The company can hire temporary workers to meet the above requirements. Each temporary worker
can produce units per month. Hiringtraining cost is approx. $ per temp worker.
Inventory holding cost per camping trailer per month is $ charged to average inventory level during
a month. Before January, there are no camping trailers on hand. extra units are desired in inventory
at the end of June. Any shortage during a period is backordered at a cost of $ per camping trailer
per month.
Find the monthly and total costs of Plan A Chase and Plan B Adjusted Chase
Plan A Chase:
Note: Ending inventory of units is desired in June, hence, in June, the output is units more than
the demand.
Plan B Adjusted Chase:
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