Mike blanford master scheduler at general avionics has the following demand forecast for one line in his factory. Quarter Unit Sales
1 5000 2 10000 3 8000 4 2000
At the beginning of quarter 1, there are 1000 units in inventory. The firm has prepared the following lowing data:
Hiring cost/worker = $200
Firing Cost/worker = $400
Beginning workforce = 60 people
Inventory carrying cost = $2 per unit per quarter of ending inventory
Stockout cost = $5 per unit
Regular payroll = $1200 per employee per quarter
Overtime cost = $2 per unit
A) Each employee can produce 100 units per quarter. Demand not satisfied in any quarter is lost and incurs a stockout penalty. If mile produces exactly enough to meet demand each quarter, with no inventories at the end of quarters and no overtime, how much will he produce each quarter, and what is the overall cost?
B) Use the data in above to calculate the production amounts and costs for level rate of output with no ending inventory. In this case, allow items to be backordered. When this occurs, a $5 penalty is incurred.