SUBJECT: PRODUCTION MANAGEMENT

KINDLY DO NOT USE MS EXCEL FOR CALCULATION, HANDWRITTEN ANSWERS APPRECIATED

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A B C Corporation has developed a forecast for an item that has the following demand. Month Demand 1 220 2 170 3 400 600 5 380 6 200 7 130 8 300 4 Cost of carrying inventory is Rs.50/unit/month. Cost of O.T. Rs.20/unit Cost of Hiring Rs.100/unit Cost of Lay off Rs. 150/unit The management decides to maintain a constant production rate of Rs.200 units/month on R.T. basis and permit 25% of the R.T. production as O.T., whenever the demand exceeds R.T. production rate. To meet further demand the firm chooses to Hire and Lay off strategy. Find the total cost of this mixed strategy. A B C Corporation has developed a forecast for an item that has the following demand. Month Demand 1 220 2 170 3 400 600 5 380 6 200 7 130 8 300 4 Cost of carrying inventory is Rs.50/unit/month. Cost of O.T. Rs.20/unit Cost of Hiring Rs.100/unit Cost of Lay off Rs. 150/unit The management decides to maintain a constant production rate of Rs.200 units/month on R.T. basis and permit 25% of the R.T. production as O.T., whenever the demand exceeds R.T. production rate. To meet further demand the firm chooses to Hire and Lay off strategy. Find the total cost of this mixed strategy