Q2: A company has seasonal demand, with the forecast for the next 12 months as given below. The current labor force can produce 500 units per month. Each employee can produce 20 units per month, and is paid $2,000 per month. The inventory carrying cost is $50 per unit per period. It costs $100 to hire or layoff an employee. Assume 200 units of initial inventory and we would like to keep the similar level at the end of the year. Month 1 3 4 7 8 9 10 11 12 Demand 660 700 840 700 660 500 600 840 80 900 700 600 Please use level and chase strategy to calculate the total cost of two plans (please show your work).
Q2: A company has seasonal demand, with the forecast for the next 12 months as given below. The current labor force can produce 500 units per month. Each employee can produce 20 units per month, and is paid $2,000 per month. The inventory carrying cost is $50 per unit per period. It costs $100 to hire or layoff an employee. Assume 200 units of initial inventory and we would like to keep the similar level at the end of the year. Month 1 3 4 7 8 9 10 11 12 Demand 660 700 840 700 660 500 600 840 80 900 700 600 Please use level and chase strategy to calculate the total cost of two plans (please show your work).
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter9: Decision Making Under Uncertainty
Section: Chapter Questions
Problem 46P
Related questions
Question
![Q2: A company has seasonal demand, with the forecast for the next 12 months as given below. The
current labor force can produce 500 units per month. Each employee can produce 20 units per month,
and is paid $2,000 per month. The inventory carrying cost is $50 per unit per period. It costs $100 to hire
or layoff an employee. Assume 200 units of initial inventory and we would like to keep the similar level
at the end of the year.
Month
1
3
4
7
8
9
10
11
12
Demand
660
700
840
700
660
500
600
840
80
900
700
600
Please use level and chase strategy to calculate the total cost of two plans (please show your work).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F96a04ffb-c586-43a7-8b27-8b983d45f16d%2F29642229-acc4-4e0b-8d51-6e5ca506d997%2F5l4zc6_processed.png&w=3840&q=75)
Transcribed Image Text:Q2: A company has seasonal demand, with the forecast for the next 12 months as given below. The
current labor force can produce 500 units per month. Each employee can produce 20 units per month,
and is paid $2,000 per month. The inventory carrying cost is $50 per unit per period. It costs $100 to hire
or layoff an employee. Assume 200 units of initial inventory and we would like to keep the similar level
at the end of the year.
Month
1
3
4
7
8
9
10
11
12
Demand
660
700
840
700
660
500
600
840
80
900
700
600
Please use level and chase strategy to calculate the total cost of two plans (please show your work).
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