Brenda Smith, Inc., produces high performance manifold intakes, and has these aggregate demand requirements for the next six months. The company has an overtime capacity of 40 units. Currently, subcontracting can supply up to 50 units per month. Demand for Month M1 is 360, M2 is 370, M3 is 440, M4 is 410, M5 is 430, and M6 is 280. Previous output level is 320 units and the beginning inventory is 125 units. Back-Ordering cost $125 per unit per month Inventory holding cost $55 per unit at end of month Regular time cost $375 per unit Subcontracting cost $675 per unit Overtime cost $563 per unit Cost of Hiring units $75 per unit Cost of layoff units $150 per unit a. Produce utilizing a level strategy at 350 units in which the company incurs regular time production costs, inventory charges and any costs due to the change in the production level from the previous output level. What is the cost of this strategy? $833,450 b. Was there a need to back-order? If so, how many units? no, there was no need to bac v c. Produce utilizing a mixed strategy by producing 340 units every month. Then, utilize overtime, and subcontracting to meet demand. (Don't forget the capacity limitations on overtime and subcontracting.) What is the cost of this strategy? [Select] d. Based on the mixed strategy, what was the cost of utilizing overtime [Select] e. Produce utilizing a chase strategy (vary the workforce), based on the prior month. What is the cost of this strategy? [Select] f. Which strategy would you recommend?
