Discuss the below:
Sales and Operations Planning
Q: The president of Hill Enterprises, Terri Hill, projects the firm's aggregate demand requirements over the next 8 months as follows:
|
January
|
1,400
|
May
|
2,200
|
|
February
|
1,600
|
June
|
2,200
|
|
March
|
1,800
|
July
|
1,800
|
|
April
|
1,800
|
August
|
1,400
|
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 $100 per unit. Inventory holding cost is $20 per unit per month. Ignore any idle-time costs.
The plan is called plan C. Plan?
Keep a stable workforce by maintaining a constant production rate equal to the average gross requirements excluding initial inventory and allow varying inventory levels. Conduct your analysis for January through August.