Kansas Furniture has received the following demand requirements: Month Demand July 1,000 August 1,200 September 1,400 October 1,800 November 1,800 December 1,600 Stockout costs are $100 per unit Inventory costs are $25 per unit per month No inventory left over from June for plans A, B, and D. Plan A: Produce at a steady rate equal to minimum requirements and subcontract the rest at $60 per unit. Store additional units in inventory. What is the total cost? Plan B: Vary the workforce. June’s production was 1,300 units. The cost of hiring is $3,000 per 100 units. The cost of layoffs is $6,000 per 100 units. What is the total cost? Plan C: Keep the current workforce steady at a level producing 1,300 units per month. Subcontract the remainder to meet demand at $60 per unit. Assume 300 units in inventory available at end of June and usable in July. What is the total cost? Plan D: Keep the current workforce steady at a level producing 1,300 units per month. Permit maximum overtime at 20% at $40 per unit. The warehouse can only store 180 units. Idle the plant at $60 per unit. Subcontract any additional units at $60 per unit. What is the total cost?
Critical Path Method
The critical path is the longest succession of tasks that has to be successfully completed to conclude a project entirely. The tasks involved in the sequence are called critical activities, as any task getting delayed will result in the whole project getting delayed. To determine the time duration of a project, the critical path has to be identified. The critical path method or CPM is used by project managers to evaluate the least amount of time required to finish each task with the least amount of delay.
Cost Analysis
The entire idea of cost of production or definition of production cost is applied corresponding or we can say that it is related to investment or money cost. Money cost or investment refers to any money expenditure which the firm or supplier or producer undertakes in purchasing or hiring factor of production or factor services.
Inventory Management
Inventory management is the process or system of handling all the goods that an organization owns. In simpler terms, inventory management deals with how a company orders, stores, and uses its goods.
Project Management
Project Management is all about management and optimum utilization of the resources in the best possible manner to develop the software as per the requirement of the client. Here the Project refers to the development of software to meet the end objective of the client by providing the required product or service within a specified Period of time and ensuring high quality. This can be done by managing all the available resources. In short, it can be defined as an application of knowledge, skills, tools, and techniques to meet the objective of the Project. It is the duty of a Project Manager to achieve the objective of the Project as per the specifications given by the client.
Chapter 13 Homework
Kansas Furniture has received the following demand requirements:
Month Demand
July 1,000
August 1,200
September 1,400
October 1,800
November 1,800
December 1,600
Stockout costs are $100 per unit
Inventory costs are $25 per unit per month
No inventory left over from June for plans A, B, and D.
Plan A:
Produce at a steady rate equal to minimum requirements and subcontract the rest at $60 per unit. Store additional units in inventory. What is the total cost?
Plan B:
Vary the workforce. June’s production was 1,300 units. The cost of hiring is $3,000 per 100 units. The cost of layoffs is $6,000 per 100 units. What is the total cost?
Plan C:
Keep the current workforce steady at a level producing 1,300 units per month. Subcontract the remainder to meet demand at $60 per unit. Assume 300 units in inventory available at end of June and usable in July. What is the total cost?
Plan D:
Keep the current workforce steady at a level producing 1,300 units per month. Permit maximum overtime at 20% at $40 per unit. The warehouse can only store 180 units. Idle the plant at $60 per unit. Subcontract any additional units at $60 per unit. What is the total cost?
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