Fred's Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters. Quarter
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Question:
Fred's Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters.
Quarter | Demand | | Previous quarter's output | 800 units |
1 | 700 | | Beginning inventory | 0 units |
2 | 900 | | Stockout cost | $100 per unit |
3 | 1200 | | Inventory holding cost | $10 per unit at end of quarter |
4 | 600 | | Hiring workers | $20 per unit |
| | | Laying off workers | $40 per unit |
| | | Subcontracting cost | $200 per unit |
| | | Unit cost | $100 per unit |
Which of the following production plans is better: Plan A–chase demand by hiring and layoffs; Plan B–pure level strategy, or Plan C–700 level with the remainder by subcontracting (Show your explanation and calculation to earn full credit)?
Related Book For
Organic Chemistry structure and function
ISBN: 978-1429204941
6th edition
Authors: K. Peter C. Vollhardt, Neil E. Schore
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