Reference no: EM132262262
Appliances Inc. is preparing an aggregate production plan for washers for the next four months. The company’s expected monthly demand is given below in the chart. The company will have 650 washers in inventory at the beginning of the month and desires to maintain at least that number at the end of each month. Assume hiring and layoff/firing, if necessary, occur at the beginning of the month. Below is other critical data:
Production cost per unit = $430
Inventory carrying cost per month per unit = $40 (based on ending month inventory)
Hiring cost per worker = $800
Firing cost per worker = $1,600
Beginning number of workers = 12
Each worker can produce 100 units per month.
a. Given the planning information, develop a level production plan and a chase production plan. (Leave no cells blank - be certain to enter "0" wherever required.)
Level plan
Month Demand
1 3600
2 4000
3 4500
4 4700
Chase Plan - Varable WorkForce
Month Demand
1 3600
2 4000
3 4500
4 4700
b. Determine the cost of the two plans.
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