okersRWild makes playing cards in several different styles, but a “standard” dec
ID: 379272 • Letter: O
Question
okersRWild makes playing cards in several different styles, but a “standard” deck of cards is used for planning purposes. The average worker at JokersRWild can make 10,000 sets of decks of cards per month at a cost of $2.60 per deck during regular production and $2.90 during overtime. The company currently employs 21 workers. Experience shows that it costs $1,300 to hire a worker and $1,300 to fire a worker. Inventory carrying cost is $.41 per deck per month.
The beginning inventory is 38,000, and at least that amount is desired each month. Assume hiring and layoff/firing, if necessary, occur at the beginning of the month.
a. Given the above demand estimate, develop a six-month production plan based on level production. (Leave no cells blank - be certain to enter "0" wherever required.)
b. Determine the cost of the level production plan.
c. Develop a six-month production plan based on chase by using overtime (no workers will be fired and inventory increases if necessary). (Leave no cells blank - be certain to enter "0" wherever required.)
d. Determine the cost of the chase production plan.
e. Develop a six-month production plan based on chase by changing workforce level. (Leave no cells blank - be certain to enter "0" wherever required.)
f. Determine the cost of the chase production plan by changing workforce level.
Explanation / Answer
a) the table is filled correctly: we will use this table to find the total cost in partb
b) total regular production = 2100000, regular production cost = 2.6 per deck
total inventory = 1878000, inventory holding cost = 0.41/month
hiring = 14 workers, hiring cost = 1300
Total cost = regular production cost + inventory cost + hiring cost
= 2100000*2.6 + 1878000*0.41 + 14*1300
= 5460000 + 769980 + 18200
= 6248180
c)
d) total cost = regular production cost + overtime production cost + inventory cost
= 1260000*2.6 + 840000*2.9 + 368000*0.41
= 3276000 + 2436000 + 150880
= 5862880
e) The values entered in table are correct. we will use these values for calculating the cost in part f
f) Total cost = regular production cost + inventory cost + hiring cost + firing cost
= 2100000*2.6 + 228000*0.41 + 47*1300 + 5*1300
= 5460000 + 93480 + 61100 + 6500
= 5621080
Chase Production Plan – Using Overtime Month Demand Regular Production Overtime Inventory Number of Workers Hire Fire layoff January 200,000 210,000 0 48,000 21 0 0 February 160,000 210,000 0 98,000 21 0 0 March 200,000 210,000 0 108,000 21 0 0 April 450,000 210,000 170000 38,000 21 0 0 May 460,000 210,000 250000 38,000 21 0 0 June 630,000 210,000 420000 38,000 21 0 0 Total 2,100,000 1,260,000 840000 368,000 0 0Related Questions
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