The president'of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as followsJanuaryFebruary1,4501,600May2,3002,2001,900JuneMarch1,7001,700JulyAprilAugust1,300Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $60 per unit. Inventory holding cost is $20 per unit per month Ignore any idle-lime costs. Evaluate the foilowing planThis exercise contains only Plan EPlan E Keep the current workforce, which is producing 1,600 units per month, and subcontract to meet the rest of the demand Subcontract cost is $75 per unit.Plan EProductionSubcontractEndingInventoryMonthO December1 JanuaryDemand(Units)(Units)2001,4501,6002 February1,6001,6003 March1,7001,6004 April1,7001,6005 May2,3001,6006 June7 July8 August2,2001,6001,9001,6001,3001,600The total subcontracting cost = S (Enter your response as a whole number)The total inventory holding cost for January through August = $. (Enter your response as a whole number.)The total cost, excluding normal time labor costs, for Plan E = S (Enter your response as a whole number.)

Given: Subcontracted cost per unit = 75 Inventory holding cost per unit = 20

Answered: The total subcontracting cost = sO…

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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What is the BOM stock needed for the shoe department for April if the sales are planned at $64,000 and the stock to sales ratio is 18.3?
The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: May 1,500 1,700 1,700 June 1,700 January February March April 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). D₂₁ 0 December 1 January 2 February 3 March 4…

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The total subcontracting cost = sO (Entor your response as a whole number) The total inventory holding cost for January through August = S (Enter your response as a whole number) The total cost, excluding normal time labor costs, for Plan E = S (Enter your respornse as a whole number.)