Neal Industries manufactures blue jeans for the teen market. The S&OP; team has
ID: 3316459 • Letter: N
Question
Neal Industries manufactures blue jeans for the teen market. The S&OP; team has agreed upon a demand forecast for the following year, as shown below The company begins with 1,600,000 jeans in safety stock and desires to maintain this level consistently (and end with this level), assume that the overtime production wage rate is $45 per hour. Quarter 2 4 Demand 9,000,000 9,200,000 15,000,000 12,400,000 Current workforce Average output per worker Inventory holding cost Regular wage rate Regular production hours Hiring cost Firing/layoff cost Beginning inventory 300 workers 30,000 jeans per quarter $ 0.40 pair per quarter 30 per hour 500 hours per quarter $ 320 per worker $230 per worker $1,600,000 a. Develop a chase plan using a stable workforce of 300 workers. (Leave no cells blank - be certain to enter "O" wherever required.) Regular Production Overtime Production Ending Inventor Workers Required Quarter Demand Hire Fire layoff 9,000,000 9,200,000 15,000,000 12,400,000 5,600,000 9,000,000 4 Total 9,000,000 b. Compute the cost of a chase plan using a stable workforce of 300 workers Total costExplanation / Answer
Quarter
Demand
Regular Production
Overtime Production
Ending Inventory
Workers Required
Hire
Fire layoff
1
9000000
9000000
0
1600000
300
0
0
2
9200000
9000000
200000
1600000
307
7
0
3
15000000
9000000
6000000
1600000
500
200
0
4
12400000
9000000
3400000
1600000
414
114
0
Total
45600000
36000000
9600000
1600000
1521
321
0
Total Cost =1521*30*500+321*320+4*1600000*0.4/2
= $24197720
Quarter
Demand
Regular Production
Overtime Production
Ending Inventory
Workers Required
Hire
Fire layoff
1
9000000
9000000
0
1600000
300
0
0
2
9200000
9000000
200000
1600000
307
7
0
3
15000000
9000000
6000000
1600000
500
200
0
4
12400000
9000000
3400000
1600000
414
114
0
Total
45600000
36000000
9600000
1600000
1521
321
0
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.