Question: Q1) Evaluate each plan and find out which one is better in terms of total costs - Plan 1: for the manufacturer is to maintain

Q1) Evaluate each plan and find out which one is

Q1) Evaluate each plan and find out which one is better in terms of total costs - Plan 1: for the manufacturer is to maintain a constant workforce throughout the 6-month period. we assume that the production per day is average requirements Laverage production per day) and that we have a constant workforce, no overtime or idle time, no safety stock, and no subcontractors. The firm accumulates inventory during the slack period of demand, January through March, and depletes it during the higher-demand warm season, April through June. We assume beginning inventory = 0 and planned ending inventory=0. - Plan 2: is to maintain a constant workforce at a level necessary to meet the lowest demand month ( February ) and to meet all demand above this level by subcontracting Please use the following information. Costs table: Inventory carrying cost $ 3 per unit per month Subcontracting cost per unit $17 per unit Average pay rate $10 per hour ($80 per day - 8 working hours per day) Labor-hours to produce a unit 4 hours per unit Monthly forecasts: Month Jan Feb Expected Demand 800 Production Days 16 600 20 20 Mar Apr May Jun 800 1.250 1,350 25 25 1,500 20

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