Evaluate the given plan, Her operations manager is

Evaluate the given plan

Assignment Help Operation Management

Reference no: EM131359250

The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows:

Jan.	1,400	May	2,200
Feb.	1,600	June	2,200
Mar.	1,800	July	1,800
Apr.	1,800	Aug.	1,800

Her operations manager is considering a new plan, which begins in January with 200 units on hand. Stock out 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 A. Plan A: Vary the workforce level to execute a strategy that produces the quantity demanded in the prior month. The December demand and rate of production are both 1,600 units per month. The cost of hiring additional workers is $5,000 per 100 units. The cost of laying off workers is $7,500 per 100 units. Evaluate this plan.

Reference no: EM131359250

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