Table 9.7 Quarter Forecast 190 560 540 440 4 $100 per worker $175 per worker Hir
ID: 383238 • Letter: T
Question
Table 9.7 Quarter Forecast 190 560 540 440 4 $100 per worker $175 per worker Hiring Cost Firing Cost Regular Production Cost Overtime Production Cost Inventory Carrying Cost Production Per Employee Beginning Work Force 10 per unit S15 per unit 3 per unit 20 units/qtr 20 workers 6. ABC Company is in the process of developing a production plan for the next four quarters The company is considering two plans that are detailed below. There are currently 30 units in inventory. Using the data in Table 9.7, a) Prepare a production plan using level production, inventory, and overtime when necessary. Calculate the total cost of the production plan. b) Prepare a production plan using chase demand strategy and calculate the total cost Note: beginning inventory of 30 unitsExplanation / Answer
ANSWER:
a) The total cost of the production plan using level production is $20,460/-
b) The total cost of the production plan using chase demand strategy is $24,450/-.
The detailed working of production plan and costing is as below.
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