Reference no: EM132222845

The president of Hill? Enterprises, Terri? Hill, projects the? firm's aggregate demand requirements over the next 8 months as? follows: January 1 comma 400 1,400 May 2 comma 300 2,300 February 1 comma 500 1,500 June 2 comma 200 2,200 March 1 comma 800 1,800 July 1 comma 800 1,800 April 1 comma 700 1,700 August 1 comma 500 1,500 Her operations manager is considering a new? plan, which begins in January with 200 200 units of inventory on hand. Stockout cost of lost sales is ?$ 65 65 per unit. Inventory holding cost is ?$ 20 20 per unit per month. Ignore any? idle-time costs. Evaluate the following plans D and E. Plan D?: Keep the current workforce stable at producing 1 comma 600 1,600 units per month. In addition to the regular? production, another 20 20?% of the normal production units can be produced in overtime at an additional cost of ?$ 55 55 per unit. A warehouse now constrains the maximum allowable inventory on hand to 600 600 units or less. ?Note: Do not produce in overtime if production or inventory are adequate to cover demand.