Describe the Differences Between Level, Chase, and Mixed Production Plans

question 10

Essay

Describe the differences between level, chase, and mixed production plans. Use the forecast in the table to show the differences by creating a plan of each type. There is no beginning inventory and regular production capacity is 350 units. Overtime costs $10 extra and is limited to 50 units per month. Subcontracting is limited to 100 units per month and costs $15 per unit. Back orders cost $40 per unit and there is a cost of $5 per month to hold a unit in inventory. There is room for only 100 units in inventory.
$$\begin{array} { | l | c | } \hline { \text { Month } } & \text { Forecast } \\\hline \text { Tanuary } & 250 \\\hline \text { February } & 300 \\\hline \text { March } & 500 \\\hline \text { April } & 350 \\\hline\end{array}$$

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Definitions:

Voting Common Stock

A class of stock that grants the holder the right to vote on corporate matters at shareholders' meetings.

Goodwill

An invisible asset that emerges when purchasing a business for a price that is above the fair valuation of its net identifiable assets.

Net Loss

A financial situation where a company's total expenses exceed its total revenues, resulting in a negative profit.

Dividends

Funds distributed by a corporation to its shareholders, often as a portion of the company's profits.