Question: Right now is August 1 , 2 0 2 0 . You would like to construct an aggregate production plan for product PX 2 7

Right now is August 1,2020. You would like to construct an aggregate production plan for product PX27 for the four quarters of 2021.
Cost of regular production =65 $/u.
Cost of overtime production =97 $/u.
Inventory holding cost =5 $/u/qtr.
Cost of increasing regular production =80 $/u.
Cost of decreasing regular production =90 $/u.
The regular production in Quarter 4 of 2020 is 858 u.
The inventory a the beginning of Quarter 1 of 2021 is estimated to be 98 u.
The forecasted demand for the four quarters of 2021 are: 1,156,1,432,1,113, and 777 units.
You want to use the level production strategy with overtime production.
Furthermore, you will keep inventory as low as possible but stockouts (shortages) must be avoided.
Suppose you keep the quarterly regular production constant at 1,015 units and add overtime production if necessary.
You must perform the needed calculation and answer the question shown below.
NOTE: Do not use any comma in your answers.
The total cost of the level production strategy is ____________ dollars.

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!