Shoney Video Concepts produces a line of video streaming servers that are linked to computers for storing movies. These devices have very fast access and large storage capacity. Shoney is trying to determine a production plan for the next 12 months. The main criterion for this plan is that the employment level is to be held constant over the period. Shoney is continuing in its R&D efforts to develop new applications and prefers not to prompt any adverse feelings from the local workforce. For the same reason, all employees should put in full workweeks, even if that is not the lowest-cost alternative. The forecast for the next 12 months is MONTH January February March April May June FORECAST DEMAND 670 870 970 670 470 370 MONTH July August September October November December FORECAST DEMAND 180 200 370 770 870 970 Manufacturing cost is $170 per server, equally divided between materials and labor. Inventory storage cost is $5 per month. A shortage of servers results in lost sales and is estimated to cost an overall $24 per unit short. The inventory on-hand at the beginning of the planning period is 170 units. Ten labor hours are required per DVD player. The workday is eight hours. Develop an aggregate production schedule for the year using a constant workforce. For simplicity, assume 22 working days each month except July, when the plant closes down for three weeks' vacation (leaving seven working days). Assume that total production capacity is greater than or equal to total demand. (.e., compute workforce level based on annual demand and annual capacity). (Leave the cells blank, whenever zero (0) is required. Indicate monthly shortages using a negative ending inventory level. Round up the "number of workers" to the next whole number and round down your monthly production rates" to the next lower whole number.)
Shoney Video Concepts produces a line of video streaming servers that are linked to computers for storing movies. These devices have very fast access and large storage capacity. Shoney is trying to determine a production plan for the next 12 months. The main criterion for this plan is that the employment level is to be held constant over the period. Shoney is continuing in its R&D efforts to develop new applications and prefers not to prompt any adverse feelings from the local workforce. For the same reason, all employees should put in full workweeks, even if that is not the lowest-cost alternative. The forecast for the next 12 months is MONTH January February March April May June FORECAST DEMAND 670 870 970 670 470 370 MONTH July August September October November December FORECAST DEMAND 180 200 370 770 870 970 Manufacturing cost is $170 per server, equally divided between materials and labor. Inventory storage cost is $5 per month. A shortage of servers results in lost sales and is estimated to cost an overall $24 per unit short. The inventory on-hand at the beginning of the planning period is 170 units. Ten labor hours are required per DVD player. The workday is eight hours. Develop an aggregate production schedule for the year using a constant workforce. For simplicity, assume 22 working days each month except July, when the plant closes down for three weeks' vacation (leaving seven working days). Assume that total production capacity is greater than or equal to total demand. (.e., compute workforce level based on annual demand and annual capacity). (Leave the cells blank, whenever zero (0) is required. Indicate monthly shortages using a negative ending inventory level. Round up the "number of workers" to the next whole number and round down your monthly production rates" to the next lower whole number.)
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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Transcribed Image Text:Shoney Video Concepts produces a line of video streaming servers that are linked to computers for storing movies. These devices
have very fast access and large storage capacity.
Shoney is trying to determine a production plan for the next 12 months. The main criterion for this plan is that the employment level is
to be held constant over the period. Shoney is continuing in its R&D efforts to develop new applications and prefers not to prompt any
adverse feelings from the local workforce. For the same reason, all employees should put in full workweeks, even if that is not the
lowest-cost alternative. The forecast for the next 12 months is
FORECAST DEMAND
MONTH
January
February
March
April
May
June
FORECAST DEMAND
670
870
970
670
470
370
MONTH
July
August
September
October
November
December
180
200
370
770
870
970
Manufacturing cost is $170 per server, equally divided between materials and labor. Inventory storage cost is $5 per month. A shortage
of servers results in lost sales and is estimated to cost an overall $24 per unit short.
The inventory on-hand at the beginning of the planning period is 170 units. Ten labor hours are required per DVD player. The workday
is eight hours.
Develop an aggregate production schedule for the year using a constant workforce. For simplicity, assume 22 working days each
month except July, when the plant closes down for three weeks' vacation (leaving seven working days). Assume that total production
capacity is greater than or equal to total demand. (.e., compute workforce level based on annual demand and annual capacity). (Leave
the cells blank, whenever zero (0) is required, Indicate monthly shortages using a negative ending inventory level. Round up the
"number of workers" to the next whole number and round down your "monthly production rates" to the next lower whole number.)
Transcribed Image Text:Forecast
Beginning inventory
Avalable production
Ending inventory
Costs
Lost sales
Inventory
Total
January
670
0
February
870
0
March
970
April
670
0
May
470
0
June
370
0
July
180
0
August
200
September
370
0
October
770
Novem
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