Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the production planner, has assembled the following cost data and demand forecast: LOADING... Click the icon to view the demand forecast. LOADING... Click the icon to view the cost data. John's job is to develop an aggregate plan. The three initial options he wants to evaluate are: • Plan A: a strategy that hires and fires personnel as necessary to meet the forecast. • Plan B: a level strategy. • Plan C: a level strategy that produces 1,000 cases per quarter and meets the forecast demand with inventory and subcontracting. Part 2 a) Which strategy is the lowest-cost plan? Try hiring and layoffs (to meet the forecast) as necessary (enter your responses as whole numbers). Hiring and Layoff Plan Quarter Forecast Production Hire (Units) Layoff (Units) 1,300 1 1,700 enter your response here enter your response here enter your response here Part 3 Part 4 Part 5 Part 6 The total cost, including normal time labor costs, for this hiring and layoffs plan is $ enter your response here (enter your response as a whole number). Part 7 Construct a plan that holds employment steady (level strategy) by producing the average forecast for all four quarters (enter your responses as whole numbers). Part 8 Part 9 Part 10 Part 11 The total cost, including normal time labor costs, for this level plan is $ enter your response here (enter your response as a whole number). Part 12 Construct the level plan that holds employment steady at 1,000 plus subcontracting (enter your responses as whole numbers). Part 13 Part 14 Part 15 Part 16 The total cost, including normal time labor costs, for this level plan is $ enter your response here (enter your response as a whole number). Part 17 b) If you are John's boss, the VP for operations, which plan do you implement and why? A. Plan C, as it is the lowest cost and provides steady employment for the employees. B. Plan A, as it is the highest cost and provides steady employment for the employees. C. Plan B, as it is the highest cost and provides steady employment for the employees. D. Plan C, as it is the lowest cost and provides unsteady employment for the employees. E. Plan B, as it is the lowest cost and provides steady employment for the employees. F. Plan A, as it is the highest cost and provides unsteady employment for the employees.

Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the production planner, has assembled the following cost data and demand forecast: LOADING... Click the icon to view the demand forecast. LOADING... Click the icon to view the cost data. John's job is to develop an aggregate plan. The three initial options he wants to evaluate are: • Plan A: a strategy that hires and fires personnel as necessary to meet the forecast. • Plan B: a level strategy. • Plan C: a level strategy that produces 1,000 cases per quarter and meets the forecast demand with inventory and subcontracting. Part 2 a) Which strategy is the lowest-cost plan? Try hiring and layoffs (to meet the forecast) as necessary (enter your responses as whole numbers). Hiring and Layoff Plan Quarter Forecast Production Hire (Units) Layoff (Units) 1,300 1 1,700 enter your response here enter your response here enter your response here Part 3 Part 4 Part 5 Part 6 The total cost, including normal time labor costs, for this hiring and layoffs plan is $ enter your response here (enter your response as a whole number). Part 7 Construct a plan that holds employment steady (level strategy) by producing the average forecast for all four quarters (enter your responses as whole numbers). Part 8 Part 9 Part 10 Part 11 The total cost, including normal time labor costs, for this level plan is $ enter your response here (enter your response as a whole number). Part 12 Construct the level plan that holds employment steady at 1,000 plus subcontracting (enter your responses as whole numbers). Part 13 Part 14 Part 15 Part 16 The total cost, including normal time labor costs, for this level plan is $ enter your response here (enter your response as a whole number). Part 17 b) If you are John's boss, the VP for operations, which plan do you implement and why? A. Plan C, as it is the lowest cost and provides steady employment for the employees. B. Plan A, as it is the highest cost and provides steady employment for the employees. C. Plan B, as it is the highest cost and provides steady employment for the employees. D. Plan C, as it is the lowest cost and provides unsteady employment for the employees. E. Plan B, as it is the lowest cost and provides steady employment for the employees. F. Plan A, as it is the highest cost and provides unsteady employment for the employees.

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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Related questions

Question

Forecast Data is given within problem. Cost Data is attached

Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the production planner, has assembled the following cost data and demand forecast:

Click the icon to view the demand forecast.

Click the icon to view the cost data.

John's job is to develop an aggregate plan. The three initial options he wants to evaluate are:

• Plan A: a strategy that hires and fires personnel as necessary to meet the forecast.

• Plan B: a level strategy.

• Plan C: a level strategy that produces

1,000 cases per quarter and meets the forecast demand with inventory and subcontracting.

Part 2

a) Which strategy is the lowest-cost plan?

Try hiring and layoffs (to meet the forecast) as necessary (enter your responses as whole numbers).

Hiring and Layoff Plan
Quarter	Forecast	Production	Hire (Units)	Layoff (Units)
		1,300
1	1,700	enter your response here	enter your response here	enter your response here

Part 3

Part 4

Part 5

Part 6

The total cost, including normal time labor costs, for this hiring and layoffs plan is $

enter your response here

(enter your response as a whole number).

Part 7

Construct a plan that holds employment steady (level strategy) by producing the average forecast for all four quarters (enter your responses as whole numbers).

Part 8

Part 9

Part 10

Part 11

The total cost, including normal time labor costs, for this level plan is $

enter your response here

(enter your response as a whole number).

Part 12

Construct the level plan that holds employment steady at

1,000 plus subcontracting (enter your responses as whole numbers).

Part 13

Part 14

Part 15

Part 16

The total cost, including normal time labor costs, for this level plan is $

enter your response here

(enter your response as a whole number).

Part 17

b) If you are John's boss, the VP for operations, which plan do you implement and why?

Plan C, as it is the lowest cost and provides steady employment for the employees.

Plan A, as it is the highest cost and provides steady employment for the employees.

Plan B, as it is the highest cost and provides steady employment for the employees.

Plan C, as it is the lowest cost and provides unsteady employment for the employees.

Plan B, as it is the lowest cost and provides steady employment for the employees.

Plan A, as it is the highest cost and provides unsteady employment for the employees.

Southeast Soda Pop, Inc., has a new fruit drink for which it has high hopes. John Mittenthal, the production planner, has assembled the following cost data and demand forecast:
Click the icon to view the demand forecast.
Click the icon to view the cost data.
John's job is to develop an aggregate plan. The three initial options he wants to evaluate are:
• Plan A: a strategy that hires and fires personnel as necessary to meet the forecast.
• Plan B: a level strategy.
• Plan C: a level strategy that produces 1,000 cases per quarter and meets the forecast demand with inventory and subcontracting.
a) Which strategy is the lowest-cost plan?
Try hiring and layoffs (to meet the forecast) as necessary (enter your responses as whole numbers).
The total cost, including normal time labor costs, for this hiring and layoffs plan is $ (enter your response as a whole number).
Construct a plan that holds employment steady (level strategy) by producing the average forecast for all four quarters (enter your responses as whole numbers).
The total cost, including normal time labor costs, for this level plan is $ (enter your response as a whole number).
Construct the level plan that holds employment steady at 1,000 plus subcontracting (enter your responses as whole numbers).
The total cost, including normal time labor costs, for this level plan is $ (enter your response as a whole number).
b) If you are John's boss, the VP for operations, which plan do you implement and why?
O A. Plan C, as it is the lowest cost and provides steady employment for the employees.
O B. Plan A, as it is the highest cost and provides steady employment for the employees.
O C. Plan B, as it is the highest cost and provides steady employment for the employees.
O D. Plan C, as it is the lowest cost and provides unsteady employment for the employees.
O E. Plan B, as it is the lowest cost and provides steady employment for the employees.
O F. Plan A, as it is the highest cost and provides unsteady employment for the employees.
Quarter
1
2
3
4
Quarter
1
2
1
2
3
4
3
Forecast
1,700
1,100
1,500
1,000
1,700
1,100
1,500
1,000
Hiring and Layoff Plan
Hire
(Units)
1,700
1,100
1,500
1,000
Production
1,300
Level Plan
Ending
Hire Layoff
Forecast Production Inventory Shortage (Units) (Units)
1,300
☐☐☐☐
Quarter Forecast Production
1,300
1,000
1,000
1,000
1,000
☐☐☐☐
Layoff
(Units)
☐☐☐☐
0000
0000
0000
Level Plan
Subcontract
Ending
Hire
Layoff
(Units) Inventory (Units) (Units)
☐☐☐☐
☐☐☐☐

More Info
Costs/Other Data
Previous quarter's output = 1,300 cases
Beginning inventory = 0 cases
Stockout cost of backorders = $140 per case
Inventory holding cost = $40 per case at end of quarter
Hiring employees = $35 per case
Terminating employees = $80 per case
Subcontracting cost = $70 per case
Unit cost on regular time = $25 per case
Overtime cost = $10 extra per case
Capacity on regular time = 1,700 cases per quarter
Print
Done
-

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