Compute total regular production

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Reference no: EM13104655

You would like to construct an aggregate production plan for product X341 for the next four quarters.
Cost of regular production = 100 $/u
Cost of overtime production = 150 $/u
Inventory holding cost = 15 $/u/qtr
Cost of increasing production = 120 $/u
Cost of decreasing production = 160 $/u
Subcontracting cost = 170 $/u
Stockout cost = 180 $/u
Previous quarter's regular output = 1500 u
Beginning inventory level = 60 u
The forecasted demand for the next four quarters are: 900, 1300, 800, and 500 units.
Suppose that you want to use a chase strategy that increases and decreases production level to meet the quarter demand. You do not want to use any subcontract or overtime. Furthermore, you will keep inventory as low as possible. Stockouts are not allowed. You must perform the calculation and answer the questions shown below.
NOTE: Do not use any comma in your answers.

The regular production is decreased by__________ units in quater 1.
The regular production is increased by___________ units in quater 2.
The regular production is increased by__________units in quater 4.
Total regular production is__________units.
Total regular production cost is $____________
Total cost of increasing regular production is $ Answer____________
Total cost of decreasing regular production is $ Answer_______________
Total cost of production is $ Answer________________

Reference no: EM13104655

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