QPA produces a variety of paint products. The regular time capacity is known for

Question

QPA produces a variety of paint products. The regular time capacity is known for the next four quarters to be: 450, 450, 750, and 450 units, respectively. Production can go overtime up to 20% of RT while subcontracting can be done at the level of 200 units per quarter. RT cost is $1.00 per unit, OT is $1.50, and subcontracting cost $1.90 per unit. Holding costs are estimated at $.30 per unit per quarter. Current inventory is 250 units and ending inventories should be 300 units. Demand for the next four periods has been forecasted at 300, 850, 1,500, and 350 units, respectively. Develop the best APP for the next four quarters.

Explanation / Answer

Production Planning Quarter Demand Starting inventory Ending Inventory Average inventory Production capacity Production (RT) Production (OT) Production (subcontracting) Quantity produced 1 300 250 510 380 450 450 90 20 560 2 850 510 400 455 450 450 90 200 740 3 1500 400 0 200 750 750 150 200 1100 4 350 0 0 0 450 350 0 0 350 Total 1035

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.