Aggregate demand for company

Assignment Help Business Management

Reference no: EM1335802

Aggregate demand for company over next 8 months as follows, where each quantity is measured in cartons.

Jan 1400 may 2200

feb 1600 june 2200

march 1800 july 1800

april 1800 aug 1400

plan A uses chase strategy by producing the quantity demanded in the prior month. Plan B employs level strategy by producing at constant rate of 1400 cartons per month to meet minimum demands, combined with subcontracting for additional cartons. Both plans begin in jan with 200 cartons on hand and end with zero inventory.

December demand and rate of production are both 1600 cartons per month. Cost of hiring additional workers is $5000 per 100 cartons. cost of laying off workers is $7500 per 100 cartons. Stockout cost of lost sales is $100 per carton. Inventory holding cost is $20 per carton per month. Subcontracting costs $75 per carton.

in plan A, treat initial 200 cartons as a reduction in demand.
in plan B, treat initial 200 cartons as inventory.

1. what is total cost of plan A
2. what is total cost of plan B

Reference no: EM1335802

Questions Cloud

Elucidate how does a federal budget deficit affect : What is a government budget deficit. Elucidate how does a federal budget deficit affect the economy.

Define the use of databases and the benefits : define the use of databases in your organization. Include what database applications are used (Microsoft Access, DB2, Oracle, etc.). Conclude by proposing improvements.

Explain six simple strategies for improving the decision : Explain six Simple Strategies for Improving the Decision-Making Process and Discuss the improvements of decision making

Explain how will you deal with those obstacles : How will you deal with those obstacles and What additional information do you need before designing the details of such a program?

Aggregate demand for company : Aggregate demand for company over next 8 months as follows, where each quantity is measured in cartons. Calculate the total cost of plan A and B.

Law as a tool for social engineering : How can the law be used as a tool for social engineering? If you were in a position to enact laws.

Rise in government spending increase employment : rise in government spending increase employment and aggregate output in the short-run. Show graphically and use the GDP equation to support your answer.

What is the capacity of a particular airplane sort : You must first determine what entities want to track. Next determine what attributes are needed for each entity, and what relations exist between these entities. You should draw an E-R diagram to show these relations. Be sure to indicate all keys...

Expatriates vs. local nationals : Which would you recommend to your senior HR manager as the better approach for your North American-headquartered firm using expatriates or using local nationals?

User Account

All Pages