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

Her operations manager is considering a new plan, which begins in January with 200 units on hand and ends with zero inventory. Stockout cost of lost sales is $125 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-time costs. The plan is called plan B. Plan B: Produce at a constant rate of 1400 units per month, which will meet minimum demands. Then use subcontracting, with additional units at a premium price of $ 80 per unit. Subcontracting capacity is limited to 800 units per month. Evaluate this plan by computing the costs for January through August. Part 2 In order to arrive at the costs, first compute the ending inventory and subcontracting units for each month by filling in the table below


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