The Demand Forecast for the Next Four Periods Is 90

question 40

Essay

The demand forecast for the next four periods is 90, 100, 120, and 140 units respectively. The plant has a regular capacity of 100 units per period, an overtime capacity of 10 units per period, and a subcontractor capacity of 5 units per period. There is a $5 per unit charge for regular production, an $8 per unit charge for overtime production, and a $9 per unit charge for subcontracting. The holding cost is $3 per unit per period, no shortages are allowed and the company has 5 units in inventory at the start of the planning period.
a. How many units should be produced using overtime?
b. How many units should be produced using subcontracting?
c. What is the total inventory holding cost?
d. What is the lowest total plan cost?
e. Fill out this table showing the number of units made by period using each type of production and the resulting inventory at the end of each period.

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Definitions:

Ganzfeld Procedure

A technique used in parapsychology which aims to induce a sensory-deprived environment to test for extrasensory perception.

Replicated Successfully

The process of precisely duplicating an experiment or study to verify its original findings and ensure their reliability.

Receptor Cells

Specialized cells that detect and respond to external stimuli, transmitting signals to the nervous system.

Cornea

A transparent layer forming the front of the eye, serving as a protective covering and playing a crucial role in focusing vision.