The total cost of hirings = $. (Enter your response as a whole number.)

Marketing
20th Edition
ISBN:9780357033791
Author:Pride, William M
Publisher:Pride, William M
Chapter19: Pricing Concepts
Section: Chapter Questions
Problem 6DRQ
icon
Related questions
Question

Caluclate Total Cost of Hirings

The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows:
2,100
2,100
1,900
1,900
Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $125 per unit. Inventory holding cost is $20 per unit p
month. Ignore any idle-time costs. The plan is called plan A.
0 December
Plan A: Vary the workforce level to execute a strategy that produces the quantity demanded in the prior month. The December demand and rate of production are both 1,600 units per month. The
cost of hiring additional workers is $50 per unit. The cost of laying off workers is $80 per unit. Evaluate this plan. (Enter all responses as whole numbers.)
Note: Both hiring and layoff costs are incurred in the month of the change. For example, going from 1,600 in January to 1,500 in February incurs a cost of layoff for 100 units in February.
1 January
2 February
Hire
Stockouts
Period Month Demand Production (Units) (Units) Inventory (Units)
1,600
1,600
0
1,500
0
100
1,700
200
0
Hin
1,700
0
0
1,900
200
0
2,100
200
2,100
0
1,900
0
3 March
4 April
5 May
6 June
January
February
March
April
7 July
8
August
1,600
1,500
1,700
1,700
1,900
2,100
2,100
1,500
1,700
1,700
1,900
1,900
May
June
July
August
1,900
The total cost of hirings = $ (Enter your response as a whole number.)
Layoff
0
0
0
200
Ending
200
300
100
100
0
0
0
200
200
0
0
0
100
200
0
0
0
Transcribed Image Text:The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows: 2,100 2,100 1,900 1,900 Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stockout cost of lost sales is $125 per unit. Inventory holding cost is $20 per unit p month. Ignore any idle-time costs. The plan is called plan A. 0 December Plan A: Vary the workforce level to execute a strategy that produces the quantity demanded in the prior month. The December demand and rate of production are both 1,600 units per month. The cost of hiring additional workers is $50 per unit. The cost of laying off workers is $80 per unit. Evaluate this plan. (Enter all responses as whole numbers.) Note: Both hiring and layoff costs are incurred in the month of the change. For example, going from 1,600 in January to 1,500 in February incurs a cost of layoff for 100 units in February. 1 January 2 February Hire Stockouts Period Month Demand Production (Units) (Units) Inventory (Units) 1,600 1,600 0 1,500 0 100 1,700 200 0 Hin 1,700 0 0 1,900 200 0 2,100 200 2,100 0 1,900 0 3 March 4 April 5 May 6 June January February March April 7 July 8 August 1,600 1,500 1,700 1,700 1,900 2,100 2,100 1,500 1,700 1,700 1,900 1,900 May June July August 1,900 The total cost of hirings = $ (Enter your response as a whole number.) Layoff 0 0 0 200 Ending 200 300 100 100 0 0 0 200 200 0 0 0 100 200 0 0 0
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps with 5 images

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Marketing
Marketing
Marketing
ISBN:
9780357033791
Author:
Pride, William M
Publisher:
South Western Educational Publishing