hr_om11_ism_ch13

# So 200 units remain in inventory and january

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Unformatted text preview: o go from 1,600 in Jan to 1,400 in Feb) 10,000 (cost to go from 1,400 in Feb to 1,600 in Mar) 10,000 (cost to go from 1,600 in March to 1,800 in April) 20,000 (cost to go from 1,800 in May to 2,200 in June) 400 30,000 (cost to go from 2,200 in July to 1,800 in Aug) 400 \$85,000 ← Total Personnel Cost @ \$100 =\$40,000 Note: December demand was 1,600, and because our strategy is chasing prior-period demand, our January production is 1,600. So 200 units remain in inventory, and January production adds 200 units to this inventory, for a total of 400 units. Inventory units: Jan. 400 + Feb. 200 + July 400 + Aug. 400 = 1,400 units at \$20 = \$28,000. Stockout units: May 400 units at \$100 = \$40,000. Hiring and layoff costs = \$85,000. Total costs = \$28,000 + \$40,000 + \$85,000 = \$153,000. Plan B 13.4 Period Demand Production Ending Inv. 0 1 2 3 4 5 6 7 8 1,400 1,600 1,800 1,800 2,200 2,200 1,800 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 1,400 200 200   0   0   0   0   0   0   0 13.5 (a) Extra Cost — \$4,000 — — 400 30,000 400 30,000 800 6...
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