The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: 2,100 January 1,200 May February 1,500 June 2,300 March April 1,600 1,900 July August 1,700 1,300 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 = 1700 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 Period Month Demand Production Inventory Stockouts (Units) 0 December 200 1 January 1,200 1,700 700 0 2 February 1,500 1,700 900 0 3 March 1,600 1,700 1000 0 4 April 1,900 1,700 800 5 May 2,100 1,700 400 6 June 2,300 1,700 0 200 7 July 1,700 1,700 0 0 8 August 1,300 1,700 400 0 The total stockout cost = $ (Enter your response as a whole number.)
The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: 2,100 January 1,200 May February 1,500 June 2,300 March April 1,600 1,900 July August 1,700 1,300 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 = 1700 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 Period Month Demand Production Inventory Stockouts (Units) 0 December 200 1 January 1,200 1,700 700 0 2 February 1,500 1,700 900 0 3 March 1,600 1,700 1000 0 4 April 1,900 1,700 800 5 May 2,100 1,700 400 6 June 2,300 1,700 0 200 7 July 1,700 1,700 0 0 8 August 1,300 1,700 400 0 The total stockout cost = $ (Enter your response as a whole number.)
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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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:
January
1,200
May
2,100
February
1,500
June
2,300
March
April
1,600
1,900
July
August
1,700
1,300
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 = 1700 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
Period Month
Demand
Production Inventory Stockouts (Units)
0
December
200
1
January
1,200
1,700
700
0
2
February
1,500
1,700
900
0
3 March
1,600
1,700
1000
0
4
April
1,900
1,700
800
5
May
2,100
1,700
400
6
June
2,300
1,700
0
200
7
July
1,700
1,700
0
0
8 August
1,300
1,700
400
0
The total stockout cost = $
(Enter your response as a whole number.)
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