B D E G H - 9 K M M N R Cool Air Inc., a fictitious manufacturer of air condiditoners, has estimated the demand for its air conditioners for the upcoming year in the following table. $180 2 $300 $350 $15 20 0.3 500 0 January February March 700 8501 a. Use a level production strategy if Cool Air has 25 full-time employees whose regular time production rate is two air conditioners per day and costs of $180 per unit. Use inventory and backorders to absorb variations in demand. Inventory carrying cost is $15 per unit per month and backorder cost is $20 per unit per month. June July April 900 May 1200 August September October November December Total 1450 1100 1000 880 720 600 1250 1350 12000 b. Use a chase production strategy. Hiring and tranining an employee costs per $400. The per-employee layoff cost is $300. Current workforce size is 25 full-time employees. A 1 c: Mixed Production strategy 2 Reg. time production cost/unit 3 Production rate/worker/day in units 4 Overtime cost/unit 5 Subcontracting cost/unit 6 Average inventory holding cost/unit/month 7 Current Workforce 8 Overtime Limit 9 Subcontracting Limit 10 Beginning Inventory 11 12 Forecast 13 # of working days 14 Regular time Production 15 Overtime production 16 Subcontracting 17 Beginning Inventory 18 Ending Inventory 19 Average Inventory 20 Production and Inventory Costs 21 Reg. time production cost in $ 22 Overtime cost in $ 23 Subcontracting cost in $ 24 Inventory holding cost in $ 25 Total cost In $ 26 22 20 23 22 24 22 23 17 21 22 20 20 c. Use a mixed production strategy with a constant force of 20 employees per months. Use inventory, overtime, and subcontracting to absorb demand variations. Regular time produciton cost is $200 per unit. Overtime is limited to 30% of regular time production and costs $300 per unit. Subcontracting is also limited to 500 units per month and costs $350 per unit. Inventory carrying cost is $10 per unit per month. Ignore employee idle time. d. Which plan has the minimum total cost (in U.S. dollars)? B D E G H - 9 K M M N R Cool Air Inc., a fictitious manufacturer of air condiditoners, has estimated the demand for its air conditioners for the upcoming year in the following table. $180 2 $300 $350 $15 20 0.3 500 0 January February March 700 8501 a. Use a level production strategy if Cool Air has 25 full-time employees whose regular time production rate is two air conditioners per day and costs of $180 per unit. Use inventory and backorders to absorb variations in demand. Inventory carrying cost is $15 per unit per month and backorder cost is $20 per unit per month. June July April 900 May 1200 August September October November December Total 1450 1100 1000 880 720 600 1250 1350 12000 b. Use a chase production strategy. Hiring and tranining an employee costs per $400. The per-employee layoff cost is $300. Current workforce size is 25 full-time employees. A 1 c: Mixed Production strategy 2 Reg. time production cost/unit 3 Production rate/worker/day in units 4 Overtime cost/unit 5 Subcontracting cost/unit 6 Average inventory holding cost/unit/month 7 Current Workforce 8 Overtime Limit 9 Subcontracting Limit 10 Beginning Inventory 11 12 Forecast 13 # of working days 14 Regular time Production 15 Overtime production 16 Subcontracting 17 Beginning Inventory 18 Ending Inventory 19 Average Inventory 20 Production and Inventory Costs 21 Reg. time production cost in $ 22 Overtime cost in $ 23 Subcontracting cost in $ 24 Inventory holding cost in $ 25 Total cost In $ 26 22 20 23 22 24 22 23 17 21 22 20 20 c. Use a mixed production strategy with a constant force of 20 employees per months. Use inventory, overtime, and subcontracting to absorb demand variations. Regular time produciton cost is $200 per unit. Overtime is limited to 30% of regular time production and costs $300 per unit. Subcontracting is also limited to 500 units per month and costs $350 per unit. Inventory carrying cost is $10 per unit per month. Ignore employee idle time. d. Which plan has the minimum total cost (in U.S. dollars)