The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January February 1,500 May 2,300 1,700 June 2,100 March 1,700 1,900 July August April 1,700 1,500 Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $100 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-time costs. The plan is called plan C. Plan C: Keep a stable workforce by maintaining a constant production rate equal to the average gross requirements excluding initial inventory and allow varying inventory levels. Conduct your analysis for January through August. The average monthly demand requirement = 1800 units. (Enter your response as a whole number.) In order to arrive at the costs, first compute the ending inventory and stockout units for each month by filling in the table below (enter your responses as whole numbers). Ending Demand Production Inventory Stockouts Period Month (Units) December 200 1 January 1,500 1,800 February 1,700 1,800 March 1,700 1,800 4 April 1,700 1,800 May 2,300 1,800 6 June 2,100 1,800 7 July 1,900 1,800
The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January February 1,500 May 2,300 1,700 June 2,100 March 1,700 1,900 July August April 1,700 1,500 Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $100 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-time costs. The plan is called plan C. Plan C: Keep a stable workforce by maintaining a constant production rate equal to the average gross requirements excluding initial inventory and allow varying inventory levels. Conduct your analysis for January through August. The average monthly demand requirement = 1800 units. (Enter your response as a whole number.) In order to arrive at the costs, first compute the ending inventory and stockout units for each month by filling in the table below (enter your responses as whole numbers). Ending Demand Production Inventory Stockouts Period Month (Units) December 200 1 January 1,500 1,800 February 1,700 1,800 March 1,700 1,800 4 April 1,700 1,800 May 2,300 1,800 6 June 2,100 1,800 7 July 1,900 1,800
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
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Transcribed Image Text:The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows:
1,500
May
January
February
2,300
1,700
June
2,100
March
1,700
July
1,900
April
1,700
August
1,500
Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $100
per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-time costs. The plan is called plan C.
Plan C: Keep a stable workforce by maintaining a constant production rate equal to the average gross requirements excluding initial inventory and
allow varying inventory levels.
Conduct your analysis for January through August.
The average monthly demand requirement = 1800 units. (Enter your response as a whole number.)
In order to arrive at the costs, first compute the ending inventory and stockout units for each month by filling in the table below (enter your responses
as whole numbers).
Ending
Production Inventory
Stockouts
Period
Month
Demand
(Units)
December
200
1
January
1,500
1,800
2
February
1,700
1,800
March
1,700
1,800
4
April
1,700
1,800
5
May
2,300
1,800
6.
June
2,100
1,800
July
1,900
1,800
LO
(O N
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