Question: Her operations manager is considering a new plan, which begins in January wah 200 units on hand and ends with zero imventory. Stockout cost of
Her operations manager is considering a new plan, which begins in January wah 200 units on hand and ends with zero imventory. Stockout cost of lost sales is \$100 per unit. Inventory holding cost is $20 per unit per morth. Ignore any ide-time costs. The plan is caled plan Plan B: Produce at a constant rate of 1,500 unils per month, which wil meet minimum demands, Then use subcontracting, with additional units at a premium price of s80 per unit. Subcontracting capecty is limited to 600 units per month. Evaluate this plan by computing the costs for January through August. In order to arrive at the costs, first compule the ending invertory and subcontracting units for each morth by filting in the table below (enter your responses as whole nombers)
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
