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Problem 11-5 Manager T. C
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Problem 11-5

Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must develop an aggregate plan given the forecast for engine demand shown in the table. The department has a normal capacity of 130 engines per month. Normal output has a cost of \$60 per engine. The beginning inventory is zero engines. Overtime has a cost of \$90 per engine.

Month

12345678Total

Forecast1201351401201251251401351,040

a.

Develop a chase plan that matches the forecast and compute the total cost of your plan. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Omit the "\$" sign in your response.)

Period               1               2               3               4               5               6               7               8            Total

Forecast1201351401201251251401351,040

Output

Regular

Overtime

Subcontract

Output - Forecast

Inventory

Beginning

Ending

Average

Backlog

Costs:

Output

Regular\$ \$

Overtime

Subcontract

Inventory

Backorder

Total\$ \$

b.

Compare the costs to a level plan that uses inventory to absorb fluctuations. Inventory carrying cost is \$2 per engine per month. Backlog cost is \$90 per engine per month. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever required. Omit the "\$" sign in your response.)

Period               1               2               3               4               5               6               7               8            Total

Forecast1201351401201251251401351,040

Output

Regular

Overtime

Subcontract

Output - Forecast

Inventory

Beginning

Ending

Average

Backlog

Costs:

Output

Regular\$ \$

Overtime

Subcontract

Inventory

Backorder

Total\$ \$

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Problem 11-5 Manager T. C
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Problem 11-5 Manager T. C. Downs of Plum Engines, a producer of lawn mowers and leaf blowers, must develop an aggregate plan given the forecast for engine demand shown in the table. The department has a normal capacity of 130 engines per month. Normal output has a cost of \$60 per engine. The beginning inventory is zero engines. Overtime has a cost of \$90 per engine. Month 1 2 3 4 5 6 7 8 Total Forecast 120 135 140 120 125 125 140 135 1,040 a. Develop a chase plan that matches the forecast and compute the total cost of your plan. (Negative amounts should be indicated by a minus sign. Leave no cells blank - be certain to enter "0" wherever requir...
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