The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 2,100 February 2,200 Period Month December January 0 1 2 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 $125 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-time costs. The plan is called plan A. 3 4 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 $50 per unit. The cost of laying off workers is $80 per unit. Evaluate this plan. (Enter all responses as whole numbers.) Note: Both hiring and layoff costs are incurred in the month of the change. For example, going from 1,600 in January to 1,200 in February incurs a cost of layoff for 400 units in February D 5 6 7 8 February March March April April May June July August 1,200 1,600 1,800 1,800 1,600 1,800 1,800 Hire Demand Production (Units) 1,600 1,600 1,200 1,600 2,100 2,200 1,800 1,800 May June July August 1,200 1,600 1,800 1,800 2,100 2,200 1,800 1,800 1,800 Layoff Ending (Units) Inventory 200 27 Stockouts (Units)

The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: January 2,100 February 2,200 Period Month December January 0 1 2 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 $125 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-time costs. The plan is called plan A. 3 4 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 $50 per unit. The cost of laying off workers is $80 per unit. Evaluate this plan. (Enter all responses as whole numbers.) Note: Both hiring and layoff costs are incurred in the month of the change. For example, going from 1,600 in January to 1,200 in February incurs a cost of layoff for 400 units in February D 5 6 7 8 February March March April April May June July August 1,200 1,600 1,800 1,800 1,600 1,800 1,800 Hire Demand Production (Units) 1,600 1,600 1,200 1,600 2,100 2,200 1,800 1,800 May June July August 1,200 1,600 1,800 1,800 2,100 2,200 1,800 1,800 1,800 Layoff Ending (Units) Inventory 200 27 Stockouts (Units)

Marketing

20th Edition

ISBN:9780357033791

Author:Pride, William M

Publisher:Pride, William M

Chapter19: Pricing Concepts

Section: Chapter Questions

Problem 6DRQ

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