Reddick's Specialty Electronics Makes Weatherproof Surveillance Systems for Parking Lots

question 75

Essay

Reddick's Specialty Electronics makes weatherproof surveillance systems for parking lots.Demand estimates for the next four quarters are 25,9,13,and 17 units.The firm is preparing an aggregate plan that uses inventory,regular time and overtime and back orders.Subcontracting is not allowed.Regular time capacity is 15 units for quarters 1 and 2,18 units for quarters 3 and 4.Overtime capacity is 3 units per quarter.Regular time cost is $2000 per unit,while overtime cost is $3000 per unit.Back order cost is $300 per unit per quarter;inventory holding cost is $100 per unit per quarter.Beginning inventory is zero.
The data inputs for this problem,and the optimal solution,generated by microcomputer software,appear below.Answer the following questions based on the scenario and the solution.
a.How many total units will be produced in quarter 1 for delivery in quarter 1?
b.How many units in total will be used to fill back orders over the four quarters?
c.What is the cost to produce one unit in Quarter 4 using overtime to deliver in quarter 1 (filling a back order)?
d.At the end of quarter 3,what is the ending inventory of finished systems?
e.What is the total cost of the solution?
f.What is the average cost per unit?

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Definitions:

Ownership Percentage

The fraction of an investment or business enterprise owned by an individual or entity, usually expressed as a percentage.

Bud Ltd.

is not a universally recognized key term; it might refer to a specific entity or business and its significance might vary by context. NO.

Equity Method

An accounting technique used to record investments in other companies where the investor has significant influence but does not control the company outright.

Consolidation Method

An accounting technique used for combining the financial statements of subsidiary companies with the parent company.