LEVEL PLAN $(10$ pts$)$

Continue to Next Page$25$ BUAD$3$

Ne Thurs

ckf

period

Forecast

Output

Output $-$ Forecast

Inventory

Inventory

Back orders

Total

Which plan is better from a cost standpoint? $q,(1$ pt$)$

Which plan is better for employees $($work$/$life balance$)?$ Why?

For both plans, how is quality$/$customer satisfaction potentially jeopardized?

$(1$ pt$)$

$(2$ pt$)$

Level: $$

Chas

$$

If demand was to increase over time, what SPECIFIC, STRATEGIC action must Wes and Steve undertake to ensure profitability, cost effectiveness and quality for their business? $($FYI $-$ there is only one correct answer to this Q$.)$Background:

Wes and Steve are partners in a lunch truck company that operates a central kitchen and operates lunch trucks that travel to various locations in Philadelphia, Monday$-$Friday. The lunch trucks deliver pre$-$packaged healthy sandwich and salad alternatives, fresh fruit and pre$-$packaged low$-$fat desserts and canned beverages. Together, the partners have to make many decisions about how to structure the operational aspects of the business so that it is cost effective, efficient and profitable.

Current Situation:

Wes and Steve have begun to sell their bottled hot sauce to area markets. They have prepared a forecast of expected demand for the bottles for the next $6$ periods as shown below. Given this information and the data re: capacities and costs, complete the $2$ required aggregate plans on the next pages and answer the Qs shown.

$\backslash$table$[[$Period$,1,2,3,4,5,6,$Total$],[$Forecast$,300,600,300,200,300,400,2,100]]$

Maximum regular production $=300$ units$/$period

Maximum overtime $=30$ units$/$period

Maximum Subcontracting $=500$

Beginning inventory $=0$

Regular time cost $=$ $$10$

Overtime cost $=$ $$15$

Sub$-$contract cost $=$ $$25$

Inventory holding costs are $$2/$average unit$/$period

Backorders cost of $$\frac{20}{?}$ unit$/$period

$*$PLEASE SOLVE AND SHOW STEPS HOW TO SOLVE ON PAPER$*$