1)It costs $12 to make a single unit using regular production and $15 to make a single unit using overtime production. The manufacturing plant has a regular production capacity of 250 units per month. There is a $5 per unit charge for holding inventory at the end of each month and a limit of 250 units ending inventory for any period. Develop the chase and level production plans for this data. Which option would you pick? Why? (0.75 points)
2)Regular production costs $13 per unit and selling a unit represents a cash inflow of $28 per unit. Assume that all units reflected on the forecast will be sold. What is the cumulative net cash flow through March? (0.25 points)
3) A law firm always orders 50 cases of paper from their office supply company. They incur an annual holding cost of $15 per case and have an ordering cost of $25 each time they place an order. If their annual demand is 480 cases, how much could they save annually by switching to their economic order quantity? (0.5 points)
4) Nothing is too good for my cats, so all their food is custom made at Catastic, who operates a specialty organic food mill in an adjacent state. We need 500 pounds of food per year, distributed evenly throughout the year. It costs $20 shipping and handling to place and receive an order for this delicious food. The cats are fed only on week days, so the 500 pounds per year translates to 2 pounds per day (we go out to restaurants on the weekends). Of course, my cats don't always eat exactly 2 pounds per day, their demand could more precisely be described as an average of 2 pounds and a standard deviation of 0.3 pounds per day. It takes ten days on average to receive an order for food once I place it. It costs $35 to hold a pound of food in inventory for a year and the food costs $850 per pound. It's expensive, yes, but again, nothing is too good for my cats.
What amount should I order and when should I order it if I want only a 1% chance of running out of food for my cats (z= 2.33)? (0.5 points)
5) A manufacturing company enters 2016 with a forecast and customer orders as shown in the table. They have a beginning inventory of 25 units and a batch size of 25 units (all MPS quantities must be in multiples of 25). Complete the rest of the master production schedule by filling in the projected ending inventory, master production schedule quantity, and available to promise rows. (0.5 points)
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