Solved

A Paint Company Has the Following Aggregate Demand Requirements and Cost

question 62

Multiple Choice

A paint company has the following aggregate demand requirements and cost data for the upcoming year by quarter.
Table 2
$\begin{array} { | l | l | } \hline \text { QUARTER } & \begin{array} { l } \text { FORECAST DEMAND } \\\text { (UNITS) }\end{array} \\\hline 1 & 1,200 \\\hline 2 & 1,500 \\\hline 3 & 1,900 \\\hline 4 & 1,000 \\\hline \text { TOTAL: } & 5,600 \\\hline\end{array}$ $\begin{array}{ll}\text { Previous quarter's production: } & 900 \text { units } \\\hline \text { Beginning inventory: } & 0 \\\hline \text { Backorder costs: } & \$ 60 / \text { unit } \\\hline\text { Inventory-holding cost }\\\text { (on ending inventory) : } & \$ 12 / \text { unit/quarter } \\\hline \text { Hiring employees: } & \$ 30 / \text { unit increase } \\\hline \text { Firing employees: } & \$ 70 / \text { unit decrease } \\\hline\text { Unit cost: } & \$ 45 / \text { unit } \\\hline \text { Overtime cost: } & \$ 67.50 / \text { unit }\\\end{array}$ ____________________________________________________________________
-Using the data in Table 2, determine the inventory holding and backorder costs for the year if the paint company wants to use a pure level strategy, ending Quarter 4 with no inventory.

Definitions:

ALU

Arithmetic Logic Unit, a critical component of a computer's central processing unit (CPU) that performs arithmetic and logic operations on the data it processes.

Special Interest Groups

Organizations or associations formed to represent and advocate for the specific interests of a particular group of people in political, social, or economic spheres.

Socialized Medicine

A healthcare system where the government owns and operates healthcare facilities and employs healthcare professionals, aiming to provide universal healthcare.

High-Tech Industry

Industries involved in producing advanced technological goods and services, including computing, telecommunications, and biotechnology, among others.