Question

company is interested in developing a quarterly aggregate production plan but they are not sure if a level strategy with backorders or a chase strategy would be better. they have the following information available regarding their production​ operation: hiring workers ​$40 per unit layoff workers ​$80 per unit inventory holding cost ​$40 per unit per quarter stockout cost for backorders ​$150 per unit production​ (labor) cost ​$30 per unit subcontracting cost ​$60 per unit previous​ quarter's production 1300 units beginning inventoy 0 units quarter forecasts are​ 2000, 6000,​ 4000, 5000, respectively. this problem has 5 questions. suppose that you want to use a level plan with backorders​ (one that produces at the average demand over the four​ quarters). answer the next two questions using this plan. do not round your intermediate calculations. round your final answer to the nearest whole number

Answer 1

A. if demand in this month greater than the previous month Hiring = This month production - previous month production Layoff = 0

B. .If the demand of this month less than that of previous month hiring = 0 Layoff = Previous month production - this month production.

How do production operations function?

The definition of production operations management Production operations management is the process of converting the resources of an organization into products and services. The processes involved in producing products are covered by production management. Production and service delivery are two topics that fall under the purview of operations management.

According to the given information:

Demand            Production                  Hire               fire

0 1300                         - -

1 4000               4000                2700 = (4000-1300) 0

2 2000                      2000        2000 = (4000-2000)      0

3 4000                4000        2000 = (4000-2000) 0

4 5000                5000        1000 = (5000-4000) 0

Firing cost for quarter 2 = 2000 * $80 = $160000

A. if demand in this month greater than the previous month Hiring = This month production - previous month production Layoff = 0

B. .If the demand of this month less than that of previous month hiring = 0 Layoff = Previous month production - this month production.

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