Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the production planner, has assembled the following demand forecast: Q1 1,800, Q2 1,100, Q3 1,600, Q4 900 COSTS/OTHER DATA Previous quarter's output = 1,300 cases Beginning inventory = 50 cases Back-Order cost = $150 per case per quarter Inventory holding cost = $40 per case at end of quarter Hiring employees = $40 per case Terminating employees = $80 per case Subcontracting cost = $60 per case Unit cost on regular time = $30 per case Overtime cost = $15 extra per case ($45) John's job is to develop an aggregate plan. The three initial options he wants to evaluate are: a. Plan A: a strategy that hires and fires personnel as necessary to produce the current period's forecast. Include any costs due the change in the production level from the previous output level. Total cost $314,000 What was th total inventory holding cost? [Select] b. Plan B: a level strategy, producing an average demand rate. Include any costs due to the change in the production level fror previous output level. Cost = $ 259,500 Was there a need to back-order units? [Select] = V . If so, how many units and what was the total back-ordering cost? [Select] d. Which strategy is the lowest-cost plan? c. Plan C: a level strategy that produces 1,200 cases per quarter and meets the forecast demand with inventory and subcontra (your subcontractor only has the capacity to fill a maximum of 300 units per quarter). Include any costs due to the change in the production level from the previous output level. Total Cost = $ 222,000 Plan C Deb Bishop Health and Beauty Products has developed a new shampoo, and you need to develop its aggregate schedule. The cost accounting department has supplied you the costs relevant to the aggregate plan, and the marketing department has provided a four-quarter forecast. All are shown as follows: Q1 1,400, Q2 1,200, Q3 1,500. Q4 1,300 Costs: Previous Quarters Output Beginning Inventory Stock-out Inventory Holding Costs Hiring Workers Layoff Workers Unit Cost Overtime Cost Subcontracting 1,500 units 100 units $50 per unit $10 per unit $40 per unit $80 per unit $30 per unit $15 extra per unit ($45) $60 per unit Your job is to develop an aggregate plan for the next four quarters. a. Plan A - Hire or fire to produce exactly the prior quarter's demand. What is the cost of this plan? $ [Select] How much was spent on hiring? [Select] b. Plan B - Adopt a level strategy at a production rate of 1,150 units per quarter where one holds the employment steady. What the cost of this plan? $ [Select] What were the total lost sales, including the cost? [Select] c. Plan C - Utilize a mixed strategy, first produce at a level production rate of 900 per quarter, then utilizing overtime with a cap of 200 units, then subcontracting. What is the cost of this plan? $ [Select] d. Which is the more economical plan for Deb Bishop Health and Beauty Products? [Select] Holding cost Subcontract Regular time OT Capacity increase Capacity decrease Backlog cost June capacity and demand Beginning inventory $8/toolbox/month $80/toolbox $45/toolbox Regular time cost plus additional $20 per toolbox $50/unit $90/unit $10/toolbox/month 500 toolboxes O toolboxes What is the total holding (inventory) cost for this plan? [Select] Month What is the total holding (inventory) cost for this plan? [Select] July Which plan should the toolbox maker choose? [Select] August September October November December Demand 400 500 Plan A: Try a level strategy where the company produces to the average demand (of July-December) by allowing capacity increases (hiring) and decreases(firing) to occur. What is the total cost of this plan? [Select] 500 700 800 700 Plan B: In this plan, the toolbox maker would to the minimum demand of the 6 month planning period, then use subcontracting each month to meet that month's demand, ensuring that there is no backlog. What is the total cost of this plan? [Select] Mary Rhodes, operations manager at Northeast Furniture, received the following demand forecast: Jan: 1,000; Feb. 1,200; March 1,400; April 1,800; May 1,800; June 1,600 Assume stockout costs for lost sales of $100 per unit, inventory carrying costs of $25 per unit per month and zero beginning and ending inventory. Evaluate the following two plans on an incremental cost basis: Alternative 1: Produce at a steady rate, equal to minimum requirements, of 1,000 units per month. Subcontract enough additional units, at $60 per unit premium cost, to avoid lost sales. What is the cost of alternative 1? [Select] What is the total holding (inventory) cost? [Select] Alternative 2: Vary the workforce to match monthly demand. The current workforce most recently produced 1,300 units last month. The cost of hiring workers is $3,000 per 100 units of capacity increase, while firing is $6,000 per 100 units of capacity decrease. What is the total cost of alternative 2? [Select] How many units are produced via regular time production? [Select ] units Which alternative has lower incremental cost (cost per unit; they are producing 8,800 units)? [Select] The following forecast constitutes the demand for relay switches. John Smith, the production planner, has assembled the following cost data and the quarterly demand forecast: Quarter 1 3 4 Costs/Other Data Forecast 1800 1100 1600 900 Previous quarter's output = 1300 cases Beginning inventory = 350 cases Stock-out cost = $110 per case Inventory holding cost = $30 per case at the end of quarter Hiring employees = $40 per case Terminating employees = $75 per case Subcontracting cost = $60 per case Unit cost on regular time = $30 per case Overtime cost = $20 extra per case Hiring employees = $40 per case Terminating employees = $75 per case Subcontracting cost = $60 per case Unit cost on regular time = $30 per case Overtime cost = $20 extra per case John's job is to develop an aggregate plan. The three initial options he wants to evaluate are: Plan A: a strategy that hires and fires personnel to have monthly production meet the forecast. Plan B: a level strategy, producing the average forecast by regular time production each month. Plan C: a level strategy that produces 1,200 cases per quarter and meets the forecast demand with inventory and subcontracting. a. What is the cost of plan A? [Select] b. What is the cost of plan B? [Select] c. What is the cost of plan C? [Select] d. If you are John's boss, the VP for operations, which plan do you implement? [Select]

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Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the production planner, has assembled the following demand forecast: Q1 1,800, Q2 1,100, Q3 1,600, Q4 900 COSTS/OTHER DATA Previous quarter's output = 1,300 cases Beginning inventory = 50 cases Back-Order cost = $150 per case per quarter Inventory holding cost = $40 per case at end of quarter Hiring employees = $40 per case Terminating employees = $80 per case Subcontracting cost = $60 per case Unit cost on regular time = $30 per case Overtime cost = $15 extra per case ($45) John's job is to develop an aggregate plan. The three initial options he wants to evaluate are: a. Plan A: a strategy that hires and fires personnel as necessary to produce the current period's forecast. Include any costs due the change in the production level from the previous output level. Total cost = $ 314,000 What was th total inventory holding cost? [Select] b. Plan B: a level strategy, producing an average demand rate. Include any costs due to the change in the production level fror previous output level. Cost = $ 259,500 . Was there a need to back-order units? [Select] If so, how many units and what was the total back-ordering cost? [Select] c. Plan C: a level strategy that produces 1,200 cases per quarter and meets the forecast demand with inventory and subcontra (your subcontractor only has the capacity to fill a maximum of 300 units per quarter). Include any costs due to the change in the production level from the previous output level. Total Cost = $ 222,000 d. Which strategy is the lowest-cost plan? Plan C Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the production planner, has assembled the following demand forecast: Q1 1,800, Q2 1,100, Q3 1,600, Q4 900 COSTS/OTHER DATA Previous quarter's output = 1,300 cases Beginning inventory = 50 cases Back-Order cost = $150 per case per quarter Inventory holding cost = $40 per case at end of quarter Hiring employees = $40 per case Terminating employees = $80 per case Subcontracting cost = $60 per case Unit cost on regular time = $30 per case Overtime cost = $15 extra per case ($45) John's job is to develop an aggregate plan. The three initial options he wants to evaluate are: a. Plan A: a strategy that hires and fires personnel as necessary to produce the current period's forecast. Include any costs due the change in the production level from the previous output level. Total cost = $ 314,000 What was th total inventory holding cost? [Select] b. Plan B: a level strategy, producing an average demand rate. Include any costs due to the change in the production level fror previous output level. Cost = $ 259,500 . Was there a need to back-order units? [Select] If so, how many units and what was the total back-ordering cost? [Select] c. Plan C: a level strategy that produces 1,200 cases per quarter and meets the forecast demand with inventory and subcontra (your subcontractor only has the capacity to fill a maximum of 300 units per quarter). Include any costs due to the change in the production level from the previous output level. Total Cost = $ 222,000 d. Which strategy is the lowest-cost plan? Plan C