Part 3 Questions 812 The forecasted demand is 12000 15000 14

Part 3. Questions 8-12

The forecasted demand is 12000, 15000, 14000, 17000, for quarters 1,2,3,4, respectively. The beginning and ending annual inventory is 1400, no negative inventory is allowed, unit carrying cost is $7/item/quarter, hiring cost is $250/worker, firing cost is $280/worker, and the labor standard is 6.5 hours/unit. An optimal production plan of 11600, 14000, 14000, 18400, for quarters 1,2,3,4, was obtained by minimizing the total annual cost which is the sum of the total annual carrying cost, the total annual hiring cost, and the total annual firing cost.

Question 8. From the optimal production plan, what is the production for quarter 1?

   (A) 12000    (B) 11600    (C) 14500    (D) 14000    (E) none of the above

Question 9. From the optimal production plan, what is the average annual inventory?

     (A) 700     (B) 1400     (C) 1200     (D) 600    (E) none of the above

Solution

from the given information:

8. the production for quarter 1 is 11600.

9. the average annual inventory is 1400.