Helter Industries, a company that produces a line of women\'s bathing suits, hir

Question

Helter Industries, a company that produces a line of women's bathing suits, hires temporaries to help produce its summer product demand. For the current four-month rolling schedule, there are three temps on staff and 12 full-time employees. The temps can be hired when needed and can be used as needed, whereas the full-time employees must be paid whether they are needed or not. Each full-time employee can produce 205 suits, while each part-time employee can produce 165 suits per month. Demand for bathing suits for the next four months is as follows: MAY JUNE JULY AUGUST 3,140 2,740 3,040 2,940 Beginning inventory in May is 404 complete (a complete two-piece includes both top and bottom) bathing suits. Bathing suits cost $40 to produce and carrying cost is 36 percent per year. Develop an aggregate plan that uses the 12 full-time employees each month and a minimum number of temporary employees. Assume that all employees will produce at their full potential each month. Calculate the inventory carrying cost associated with your plan using planned end of month levels. (Round "Inventory cost" to 2 decimal places.)

Explanation / Answer

Carrying cost per unit = $40*36%/12 = $ 1.20 per month

Total units of inventory carried = 272

Total inventory carrying cost = 272*$1.2 = $ 326.40

Detailed Aggregate plan and the calculations are given below

Aggregate Production Plan using - Hybrid Strategy Production/Inventory Planning MAY JUNE JULY AUGUST Total Unit Total 1 1 1 1 Units Cost ($) Cost ($) Demand 3,140 2,740 3,040 2,940 11,860 Net Cumulative Demand 2,736 5,476 8,516 11,456 Cumulative Production 2,955 5,415 8,535 11,490 Inventory (Excess Units) 219 0 19 34 272 1.20 326.40 Backorders (Units Short) 0 61 0 0 61 0 Capacity Planning Part-time Employees 3 4 3 10 0 Labor Standard part-time (units/worker/month) 165 165 165 165 0 Full-Time Workforce Available 12 12 12 12 Labor Standard full-time (units/worker/month) 205 205 205 205 Regular Production (units) 2,955 2,460 3,120 2,955 11,490 0 Total Production Capacity (units) 2,955 2,460 3,120 2,955 Total Cost           326.40

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

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