The Following Information Relates to a Company's Aggregate Production Planning

question 3

Multiple Choice

The following information relates to a company's aggregate production planning activities: Beginning Workforce = 125 workers
Production per Employee = 500 units per quarter
Hiring Cost = $750 per worker
Firing Cost = $1,500 per worker
Inventory Carrying Cost = $10 per unit per quarter
If a chase demand strategy is used the number of workers fired at the start of quarter 3 is

• A) 0
• B) 40
• C) 50
• D) 75

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Definitions:

Cost of Goods Sold

The total cost of all materials, labor, and overhead used to produce goods sold by a business during an accounting period.

Merchandise Inventory

Goods that a company holds for the purpose of selling them to customers, often a significant current asset on the balance sheet.

Accounts Payable

Liabilities of a business that represent money owed to creditors for goods and services purchased on credit.

Accounts Payable

the amount a company owes to suppliers or creditors for goods and services bought on credit.