(Solved)Osprey Fabrication has the following aggregate demand req
Osprey Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters.
Quarter
Demand
Previous quarter’s output
1300 units
1
1000
Beginning inventory
0 units
2
1200
Stockout cost
$50 per unit
3
1600
Inventory holding cost
$10 per unit at end of quarter
4
1500
Hiring workers
$40 per unit
Firing workers
$80 per unit
Subcontracting cost
$60 per unit
Unit cost
$30 per unit
Overtime
Idle time cost
$15 extra per unit
$20
Which of the following production plans is better: Plan A—chase demand by hiring and firing. Which chase method is more cost effective? Explain. Plan B—smooth production (average gross demand), or Plan C—1300 level with the remainder by overtime. Maximum capacity for overtime is 200 units. Warehouse limitation is 200 units.
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Answer to Osprey Fabrication has the following aggregate demand req. . .
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