APP Trial and Error

Given the following information:

Quarter Demand

1 6,400

2 9,000

3 10,200

4 3,300

Regular Prod. Capacity = 7,225 units/qtr

Regular Prod. Cost = $12/unit

Overtime Prod. Capacity = 2,000 units/qtr

Overtime Prod. Cost = $17/unit

Subcontracting Capacity = 10,000 units/qtr

Subcontracting Cost = $22/unit

Inventory Cost = $5/unit/qtr

Beginning Inventory = 0 units

Backordering Cost = $12/unit/qtr

Beginning workforce = 50 workers

Hiring Cost = $2000/worker

Production rate/worker = 200 units/qtr

Firing Cost = $5000/worker

Develop a Production Plan using Level Production with Overtime and Subcontracting Strategies.

a. How many units will be produced by the Subcontractor during the 3rd quarter?

b. What is the cost of the plan?

Develop a Production Plan using Chase Demand with Subcontracting Strategies. (Hint: # of workers should be an integer value, round up values.)

c. How many workers will be hired by the company during the 2nd quarter?

d. What is the cost of the plan?