Documente Academic
Documente Profesional
Documente Cultură
Output costs:
Regular time = $5 per unit
Overtime = $8 per unit
Subcontracted = $12 per unit
Other costs:
Inventory carrying cost = $3 per unit per period applied to average inventory
Backorders = $10 per unit per period
Cost of aggregate plan utilizing a level strategy:
Output costs:
Regular time = $5 1,500 = $7,500
Overtime = $8 0 = 0
Subcontracted = $10 0 = 0
Other costs:
Inventory carrying cost = $3 850 = $2,400
Backorders = $10 100 = $1,000
Total cost = $10,900
policy prevents us from utilizing backorders and limits our plan to no more than
50 units of overtime per period. Notice that the regular output level is constant,
implying a level workforce, while overtime and subcontracting are used to meet
demand on a period by period basis (chase strategy). One will notice that the
cost of the combination plan is slightly lower than the cost of the level plan.
Output costs:
Regular time = $5 1,200 = $6,000
Overtime = $8 100 = 800
Subcontracted = $12 250 = 2,500
Other costs:
Inventory carrying cost = $3 325 = 975
Backorders = $10 0 = 0
Total cost = $10,275