Aggregate demand for a product family is given in the table below for the 4 quarters...

 

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Aggregate demand for a product family is given in the table below for the 4 quarters of the preceding year. The production strategy is level production, in which the same amount is produced in each quarter. Pertinent details are: The per unit cost of production is $25/unit. Inventory is held at a cost of $4/unit/quarter. Up tp 80 units can be subcontracted in any quarter at a cost of $30/unit. Demand that cannot be met from production and inventory and subcontracting is a lost sale which is accounted for at $45/unit. Compute the levels of ending inventory, subcontracting, and lost sales for the four quarters. Then compute the total cost. For level production, the production level is computed as: (Total Demand - Initial Inventory)/number periods. Quarter Demand Prior Q1 Q2 Q3 Q4 640 160 320 40 Production Ending Inventory 40 Subcontract Lost Sales What is the total of the quarterly ending inventory levels for the year? 1840 What is the total of the quarterly subcontracted levels for the year? 0 What is the total cost for the year? 7360 What is the total of the quarterly lost sale levels for the year? 0 43280X 520. 80X 240 X Aggregate demand for a product family is given in the table below for the 4 quarters of the preceding year. The production strategy is level production, in which the same amount is produced in each quarter. Pertinent details are: The per unit cost of production is $25/unit. Inventory is held at a cost of $4/unit/quarter. Up tp 80 units can be subcontracted in any quarter at a cost of $30/unit. Demand that cannot be met from production and inventory and subcontracting is a lost sale which is accounted for at $45/unit. Compute the levels of ending inventory, subcontracting, and lost sales for the four quarters. Then compute the total cost. For level production, the production level is computed as: (Total Demand - Initial Inventory)/number periods. Quarter Demand Prior Q1 Q2 Q3 Q4 640 160 320 40 Production Ending Inventory 40 Subcontract Lost Sales What is the total of the quarterly ending inventory levels for the year? 1840 What is the total of the quarterly subcontracted levels for the year? 0 What is the total cost for the year? 7360 What is the total of the quarterly lost sale levels for the year? 0 43280X 520. 80X 240 X

Answer rating: 100% (QA)

To calculate the levels of ending inventory subcontracting and lost sales for each quarter we need to consider the production strategy costs and deman... View the full answer