Solved

A Paint Company Has the Following Aggregate Demand Requirements and Cost

Question 80

Essay

A paint company has the following aggregate demand requirements and cost data for the upcoming year by quarter.
 Quarter  Forecast Demand units) 11,20021,50031,90041,000Total5,600\begin{array} { c c } \text { Quarter } & \text { Forecast Demand units) } \\\hline 1 & 1,200 \\2 & 1,500 \\3 & 1,900 \\4 & \underline { 1,000 } \\\text{Total}&5,600\end{array}  Previous quarter’s producton:  Bepinging inventory:  Backorder costs:  900 units  0units $60/ unit  Iventory holding cost  on ending inventory):  Hiring employees:  Firing employees:  $12/unit/quarter $30 unit increase $70 unit decrease \begin{array} { l c } \begin{array} { l } \text { Previous quarter's producton: } \\\text { Bepinging inventory: } \\\text { Backorder costs: }\end{array} & \begin{array} { l } \text { 900 units } \\\text { 0units } \\\$ 60 / \text { unit }\end{array} \\ \text { Iventory holding cost } & \\\begin{array} { l } \text { on ending inventory): } \\\text { Hiring employees: } \\\text { Firing employees: }\end{array} & \begin{array} { l } \text { \$12/unit/quarter } \\\$ 30 \text { unit increase } \\\$ 70 \text { unit decrease }\end{array} \\\end{array}
a. Determine the change in workforce costs hiring and firing (employees) if the paint company decides to use a chase demand strategy.
b. Determine the inventory holding and backorder costs for the year if the paint company wants to use a level production strategy, ending Quarter 4 with no inventory.

Correct Answer:

verifed

Verified

a. \[\begin{array} { c c c c }
\t ...

View Answer

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents