Question: The Baily Corporation has developed a specialized software program that improves inventory control capability. The following table/information provides the necessary data to evaluate: Quarter Forecast

The Baily Corporation has developed a specialized software program that improves inventory control capability. The following table/information provides the necessary data to evaluate:

Quarter

Forecast (units)

Regular Time

Overtime

Sub-Contract

1

500

400

80

100

2

750

400

80

100

3

900

800

160

100

4

450

400

80

100

Initial Inventory = 200 units

Regular Time Cost = $2.50/unit

Overtime Cost = $1.00/extra per unit

Subcontracting Cost = $4.00/unit

Carrying Cost = $.50/unit

Back-Order Cost = $.75/unit

a. Find the optimal plan using the transportation method. [ Select ] ["$6,535", "$6,890", "$6,345", "$6,289"]

The company decides that the initial inventory of 200 units will incur the 50/unit carrying from the prior quarter.

b. What is the total cost of the plan including this initial inventory cost adjustment? [ Select ] ["$6,635", "$6,734", "$6,832", "$6,535"]

c. Does any overtime time capacity go unused? [ Select ] ["yes", "cannot determine", "no"] If so/not, how much in which periods or not? [ Select ] ["period 3 - 60 units, period 4 - 30 units", "period 2 - 10 units, period 3 - 60 units, period 4 - 100 units", "period 3 - 100 units, period 4 - 30 units", "all overtime capacity is used"]

d. What is the extent of back-ordering in units and dollars? [ Select ] ["90 units", "50 units", "180 units", "0 - no back-ordering was utilized"]

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