Question: Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is


Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $100 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-time costs. The plan is called plan A. Plan A: Vary the workforce level to execute a strategy that produces the quantity demanded in the prior month. The December demand and rate of production are both 1,600 units per month. The cost of hiring additional workers is $50 per unit. The cost of laying off workers is $75 per unit. Evaluate this plan. (Enter all responses as whole numbers.) Note: Both hiring and layoff costs are incurred in the month of the change. For example, going from 1,600 in January to 1,400 in February incurs a cost of layoff for 200 units in February. The total overtime production cost =$. (Enter your response as a whole number. ) The total inventory holding cost for January through August =$ (Enter your response as a whole number.) The total stockout cost=$ (Enter your response as a whole number.) The total cost, excluding normal time labor costs, for Plan D=$ . (Enter your response as a whole number.)
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