Helter Industries, a company that produces a line of women\'s bathing suits, hir
ID: 465213 • Letter: H
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 201 suits, while each part-time employee can produce 161 suits per month. Demand for bathing suits for the next four months is as follows: MAY JUNE JULY AUGUST 3,230 2,830 3,130 3,030 Beginning inventory in May is 403 complete (a complete two-piece includes both top and bottom) bathing suits. Bathing suits cost $40 to produce and carrying cost is 24 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.) May June July August Forecast 3,230 2,830 3,130 3,030 Beginning inventory Production required Regular workforce Regular production Temp workforce Temp production Total production Ending inventory Inventory cost $ $ $ $ $
Explanation / Answer
No. of Full-time Employees
12
No. of Temporary Employees
3
Production per Full-time Employees per month
201
Production per Temporary Employees per month
161
Cost of suit
$40
Carrying Cost per year (%)
24%
Carrying Cost per year ($)
$9.60
Aggregate Plan
May
June
July
August
Forecast
3230
2830
3130
3030
Beginning Inventory
403
68
133
-102
Prod. Req = Forecast - Beg. Inv
Production Required
2827
2762
2997
3132
Regular Workforce
12
12
12
12
Reg. Prod = 12 x 201
Regular Production
2412
2412
2412
2412
Temp. Workforce
3
3
4
5
Temp. Prod = 12 x 201
Temp. Production
483
483
644
805
Temp. Prod + Reg. Prod.
Total Production
2895
2895
3056
3217
E.I = Total Prod. - Prod. Req.
Ending Inventory
68
133
59
85
E.I x $9.6
Inventory Carrying Cost
$652.8
$1276.8
$566.4
$816
Total Carrying Cost = 652.8 + 1276.8 + 566.4 + 816 = $3312
No. of Full-time Employees
12
No. of Temporary Employees
3
Production per Full-time Employees per month
201
Production per Temporary Employees per month
161
Cost of suit
$40
Carrying Cost per year (%)
24%
Carrying Cost per year ($)
$9.60
Aggregate Plan
May
June
July
August
Forecast
3230
2830
3130
3030
Beginning Inventory
403
68
133
-102
Prod. Req = Forecast - Beg. Inv
Production Required
2827
2762
2997
3132
Regular Workforce
12
12
12
12
Reg. Prod = 12 x 201
Regular Production
2412
2412
2412
2412
Temp. Workforce
3
3
4
5
Temp. Prod = 12 x 201
Temp. Production
483
483
644
805
Temp. Prod + Reg. Prod.
Total Production
2895
2895
3056
3217
E.I = Total Prod. - Prod. Req.
Ending Inventory
68
133
59
85
E.I x $9.6
Inventory Carrying Cost
$652.8
$1276.8
$566.4
$816
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