Questa Points out 12.00 P Flagge Lost Aggregate demand for a product family is given in the table below for the four quarters of 2007. Production cost on regular time is $3 per unit. Labor fluctuation costs are accounted for by costs of changes in production level: each unit of increase in production is accounted for at $2 per unit of increase and $1 per unit of decrease. The inventory cost is $1 per unit per quarter. When necessary, up to 10 units can be subcontracted at a cost of $5 per unit. Demand that cannot be met is a lost sale and accounted for at $10 per unit. Quarter Demand Production Production Production Subcontracted Increase Decrease Inventory Units Sale Q4 06 80 0 Q1 07 90 ? ? ? 2 ? ? Q2 07 50 ? 2 ? Q3 07 60 2 ? ? 0407 60 2 ? ? ? ? The aggregate planning technique being considered is level production hat is, the production level is the same for each quarter. Compute the total annual cost of meeting demand for 2007. (Determine the number of units to produce in each month (sumo demand minus initial inventory divided by four). Then for each month, compute the changes in productive level, the number of units to be subcontracted, ending inventory, and the lost sales). ? ? 2 2 ? 2 Answer: 13 Questa Points out 12.00 P Flagge Lost Aggregate demand for a product family is given in the table below for the four quarters of 2007. Production cost on regular time is $3 per unit. Labor fluctuation costs are accounted for by costs of changes in production level: each unit of increase in production is accounted for at $2 per unit of increase and $1 per unit of decrease. The inventory cost is $1 per unit per quarter. When necessary, up to 10 units can be subcontracted at a cost of $5 per unit. Demand that cannot be met is a lost sale and accounted for at $10 per unit. Quarter Demand Production Production Production Subcontracted Increase Decrease Inventory Units Sale Q4 06 80 0 Q1 07 90 ? ? ? 2 ? ? Q2 07 50 ? 2 ? Q3 07 60 2 ? ? 0407 60 2 ? ? ? ? The aggregate planning technique being considered is level production hat is, the production level is the same for each quarter. Compute the total annual cost of meeting demand for 2007. (Determine the number of units to produce in each month (sumo demand minus initial inventory divided by four). Then for each month, compute the changes in productive level, the number of units to be subcontracted, ending inventory, and the lost sales). ? ? 2 2 ? 2 Answer: 13