Question

1. Orange Inc., is a manufacturer of computer keyboards. Requirements over a typical six-month period are as follows; (Questions 1,2,3)

Month	January	February	March	April	May	June
Forecasted Demand	200	300	400	400	200	300

Cost and other Information

Inventory holding cost	Back ordering cost	Wages	Hiring cost	Lay off cost	Production rate	Beginning Number of employees
$1/unit/month	$2/unit/ month	$1000/worker/ employee	$400/worker	$250/worker	100/worker/ month	4 in the beginning of January

If a Chase strategy is applied, what is the total cost of the production plan, including the cost of regular wages, hiring and layoffs?

Use the following Table as a reference to calculate the total cost for this plan.                                           

Month	January	February	March	April	May	June
Forecasted Demand	200	300	400	400	200	300
Produce
Number of Employees Needed
Number of employees hired
Number of employees laid off

Group of answer choices

21,600

21,200

20,200

18,650

18,000

18,250

2. Orange Inc., is a manufacturer of computer keyboards. Requirements over a typical six-month period are as follows; (Questions 1,2,3)

Month	January	February	March	April	May	June
Forecasted Demand	200	300	400	400	200	300

Cost and other Information

Inventory holding cost	Back ordering cost	Wages	Hiring cost	Lay off cost	Production rate	Beginning Number of employees
$1/unit/month	$2/unit/ month	$1000/worker/ employee	$400/worker	$250/worker	100/worker/ month	4 in the beginning of January

What would be the production rate per month for a level strategy?

Group of answer choices

400

300

200

250

350

3. Orange Inc., is a manufacturer of computer keyboards. Requirements over a typical six-month period are as follows; (Questions 1,2,3)

Month	January	February	March	April	May	June
Forecasted Demand	200	300	400	400	200	300

Cost and other Information

Inventory holding cost	Back ordering cost	Wages	Hiring cost	Lay off cost	Production rate	Beginning Number of employees
$1/unit/month	$2/unit/ month	$1000/worker/ employee	$400/worker	$250/worker	100/worker/ month	4 in the beginning of January

If a level strategy is applied, what is the total cost of the production plan, including the cost of regular wages, hiring and layoffs, inventory holding and back ordering?

Month	January	February	March	April	May	June
Forecasted Demand	200	300	400	400	200	300
Produce
Inventory
Number of Employees Needed
Number of employees hired
Number of employees laid off

Group of answer choices

18,650

21,600

18,250

21,200

18,000

20,200

Answer 1

1.

Month	January	February	March	April	May	June	Total
Forecasted Demand	200	300	400	400	200	300
Produce	200	300	400	400	200	300
Number of Employees Needed	2	3	4	4	2	3	18
Number of employees hired	0	1	1	0	0	1	3
Number of employees laid off	2	0	0	0	2	0	4

Total cost = Wage cost + Hiring cost + Lay-off cost = 18*1000+3*400+4*250 = 20200 (Ans)

2. Level production rate per month = average(200,300,400,400,200,300) = 300 (Ans)

3.

Month	January	February	March	April	May	June	Total
Forecasted Demand	200	300	400	400	200	300
Produce	300	300	300	300	300	300
Inventory	100	100	0	0	0	0	200
backorder	0	0	0	100	0	0	100
Number of Employees Needed	3	3	3	3	3	3	18
Number of employees hired	0	0	0	0	0	0	0
Number of employees laid off	1	0	0	0	0	0	1

Total cost of the production plan, including the cost of regular wages, hiring and layoffs, inventory holding and back ordering = Wage cost + Hiring cost + Lay-off cost+inventory holding cost + back ordering cost = 18*1000+0*400+1*250+200*1+100*2 = 18650 (Ans)