Question 5 A company's forecast of demand in shown in the following table. Regular production costs $138 per unit with a monthly capacity of 47 units. Subcontracting costs $276 per unit and has unlimited capacity. It costs $13.0 per unit per month to hold inventory and $33 per unit per month to run backlogs. Period 3 Forecast 68 79 86 What is the total cost of a LEVEL aggregate plan?

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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DO NOT ROUND ANY NUMBERS FOR THIS.

Assume you can produce a fractional number of units, hold a fractional number of units in inventory, and run backlogs that include fractional units.

I suggest you use excel for this homework.

 

Please answer 5 & 6

Question 5
A company's forecast of demand in shown in the following table. Regular
production costs $138 per unit with a monthly capacity of 47 units.
Subcontracting costs $276 per unit and has unlimited capacity. It costs
$13.0 per unit per month to hold inventory and $33 per unit per month to
run backlogs.
Period
1
2
3
Forecast
68
79
86
What is the total cost of a LEVEL aggregate plan?
Transcribed Image Text:Question 5 A company's forecast of demand in shown in the following table. Regular production costs $138 per unit with a monthly capacity of 47 units. Subcontracting costs $276 per unit and has unlimited capacity. It costs $13.0 per unit per month to hold inventory and $33 per unit per month to run backlogs. Period 1 2 3 Forecast 68 79 86 What is the total cost of a LEVEL aggregate plan?
Question 6
NowJuice, Inc. produces bottled pickle juice. A planner has developed an
aggregate forecast for demand (in cases) for the next four months. Use the
following information to develop an aggregate plan using CHASE.
Month
May
June
July
August
Forecast
588
704
606
649
Cost Per Unit
Monthly Capacity
Regular Production
Overtime Production
22
400
1.5 x Regular Prod Cost
400
What is the total cost of the CHASE plan?
Transcribed Image Text:Question 6 NowJuice, Inc. produces bottled pickle juice. A planner has developed an aggregate forecast for demand (in cases) for the next four months. Use the following information to develop an aggregate plan using CHASE. Month May June July August Forecast 588 704 606 649 Cost Per Unit Monthly Capacity Regular Production Overtime Production 22 400 1.5 x Regular Prod Cost 400 What is the total cost of the CHASE plan?
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ISBN:
9780357033791
Author:
Pride, William M
Publisher:
South Western Educational Publishing