Latrisa International Inc. manufactures outdoor clothing apparel. They have developed a forecast for their sandal Line....

3.9 Ratings (477 Votes)

All the calculations are done based on the assumption that plant runs only for 1 shift:

Month	(A) Demand Forecast (Units)	(B) Production Days Per Month	(C) Average Production Days Per Month	(D) Monthly Production (Units)	(E) Subcontracting Production (Units)	(F) Monthly Inventory Change (Units)	(G) Ending Inventory (Units)
January	2,500	30	30	600	1900	600	600
February	2,475	25	25	500	1975	500	1100
March	3,000	30	30	600	2400	600	1700
April	3,500	30	30	600	2900	600	2300
May	4,100	30	30	600	3500	600	2900
June	4,525	30	30	600	3925	600	3500

Production per hour = 10*0.25= 2.5 units/hr

Production rate per day = 10*2 = 20 units per day

Total inventory carrying cost = 3500*7 = $24500

Total regular production cost = $640*175 days = $112000

Total subcontracting cost = $20*16600 = $332000

Total cost of plan = $24500+$112000 + $332000 = $468500?

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Other questions asked by students

Month	(A) Demand Forecast (Units)	(B) Production Days Per Month	(C) Average Production Days Per Month	(D) Monthly Production (Units)	(E) Subcontracting Production (Units)	(F) Monthly Inventory Change (Units)	(G) Ending Inventory (Units)
January	2,500	30
February	2,475	25
March	3,000	30
April	3,500	30
May	4,100	30
June	4,525	30