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Plan on an incremental cost? basis

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Reference no: EM131989335

The? S&OP team at Kansas? Furniture, has received estimates of demand requirements as shown in the table. Assuming? one-time stockout costs for lost sales of ?$125 per? unit, inventory carrying costs of ?$25 per unit per? month, and zero beginning and ending? inventory, evaluate the following plan on an incremental cost? basis:

Plan? A: Produce at a steady rate? (equal to minimum? requirements) of 1 comma 1,200 units per month and subcontract additional units at a ?$65 per unit premium cost. Subcontracting capacity is limited to 500 units per month. ?(Enter all responses as whole numbers?).

Reference no: EM131989335

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