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,

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 $70 per unit. Inventory holding cost is $25 per unit per month. Ignore any idle-time costs. Evaluate the following plan. This exercise contains only Plan D. Plan D: Keep the current workforce stable at producing 1,600 units per month. In addition to the regular production, another 20% of the normal production un be produced in overtime at an additional cost of $55 per unit. A warehouse now constrains the maximum allowable inventory on hand to 600 units or less. Note: Do not produce in overtime if production or inventory are adequate to cover demand. The total overtime production cost =$. (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.)

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related General Management Questions!