Question: The table below shows the aggregate sales forecasts for a product family for the year along with the number of working days per month.
The table below shows the aggregate sales forecasts for a product family for the year along with the number of working days per month. The following assumptions are made: Cost of a unit is $30. I Inventory carrying cost per unit per month is 2%. Shortage cost per unit is $50. Beginning inventory is 115, and ending inventory is 100. I Beginning labor force is 10. Month If number of workers needed has fractions, then always round up. Jan Feb Mar Apr May 253 280 340 300 393 Days/Month 20 21 23 20 22 Forecast Number of units produced per employee per day is 3. Hiring cost per employee is $200. Firing cost per employee is $500. 1 Jun Jul Aug Sep Oct Nov Dec 233 287 420 480 427 527 393 22 10 23 20 22 20 20 Develop a level production plan and a chase production plan, and compare the costs of the two plans. Note, you should plan to reach the ending inventory of 100 by the end of January.
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