A company which produces a single product has definite orders for this product over the next four quarters as follows:

The company ended the previous year with an inventory of 300 units, and the final quarter production level was 420 units. The company wishes to end this year with an inventory of at least 280 units.

It costs $30 per unit to increase the production level from one quarter to the next, and $56 per unit to decrease it. The cost of holding inventory from one quarter to the next is $40 per unit per quarter. No shortages are permitted. The company wishes to minimize the sum of production level change costs and inventory costs over the four quarter planning horizon.

Formulate (but do not solve) a model for this situation.

The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year: 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Units to be produced 8,200 6,500 7,100 8,000 Each unit requires 0.25 direct labor-hours, and direct laborers are paid $12.00 per hour.

Required: 1. Prepare the company’s direct labor budget for the upcoming fiscal year. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

2. Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter. Instead, assume that the company’s direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 1,800 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 1,800 hours anyway. Any hours worked in excess of 1,800 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor.

The number of users of a certain website (in millions) from 2004 through 2011 follows.

Using Minitab or Excel, develop a quadratic trend equation that can be used to forecast users (in millions). (Round your numerical values to one decimal place.)

T_t =

Consider the following time series.

b) Use the following dummy variables to develop an estimated regression equation to account for seasonal effects in the data:

x₁ = 1 if quarter 1, 0 otherwise; x₂ = 1 if quarter 2, 0 otherwise; x₃ = 1 if quarter 3, 0 otherwise.

=

(c)Compute the quarterly forecasts for next year.

quarter 1 forecast

quarter 2 forecast

quarter 3 forecast

quarter 4 forecast

The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year:

Each unit requires 0.75 direct labor-hours, and direct laborers are paid $16.00 per hour.

Required:

1. Prepare the company’s direct labor budget for the upcoming fiscal year. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

2. Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter. Instead, assume that the company’s direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 8,000 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 8,000 hours anyway. Any hours worked in excess of 8,000 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor.

The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year:

Each unit requires 0.65 direct labor-hours, and direct laborers are paid $10.00 per hour.

Required:

1. Prepare the company’s direct labor budget for the upcoming fiscal year. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

2. Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter. Instead, assume that the company’s direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 6,000 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 6,000 hours anyway. Any hours worked in excess of 6,000 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor.

The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year:

Each unit requires 0.25 direct labor-hours, and direct laborers are paid $16.00 per hour.

Required:

1. Prepare the company’s direct labor budget for the upcoming fiscal year. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

2. Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter. Instead, assume that the company’s direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 2,400 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 2,400 hours anyway. Any hours worked in excess of 2,400 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor.

                                                            1^st Quarter        2^nd Quarter       3^rd Quarter       4^th Quarter

Total Cash Receipts                              $150,000         175,000           100,000           450,000

Total Cash Disbursements                     $170,000         250,000           100,000           320,000

The company’s beginning cash balance for the upcoming fiscal year will be $40,000. The company requires a minimum cash balance of $15,000 and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded.

don't use "$" or ",", use "( )" for negatives and cash payments. Be mindful of letters when filling in answers.

Prepare the company’s cash budget for the upcoming fiscal year.

The production manager of Rordan Corporation has submitted the following quarterly production forecast for the upcoming fiscal year:

Each unit requires 0.35 direct labor-hours, and direct laborers are paid $20.00 per hour.

Required:

1. Prepare the company’s direct labor budget for the upcoming fiscal year. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

2. Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is not adjusted each quarter. Instead, assume that the company’s direct labor workforce consists of permanent employees who are guaranteed to be paid for at least 3,000 hours of work each quarter. If the number of required direct labor-hours is less than this number, the workers are paid for 3,000 hours anyway. Any hours worked in excess of 3,000 hours in a quarter are paid at the rate of 1.5 times the normal hourly rate for direct labor.