Statistics Solutions

(All Steps) Eagle Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters: Quarter Demand 1 1300 2 1400

Question: Eagle Fabrication has the following aggregate demand requirements and other data for the upcoming four quarters:

Quarter Demand
1 1300
2 1400
3 1500
4 1300
Previous quarter’s output 1500 units
Beginning inventory 200 units
Stock-out cost $50 per unit
Inventory holding cost $10 per unit at end of quarter
Hiring workers $4 per unit
Firing workers $8 per unit
Overtime $10 extra per unit

Which of the following production plans is better:

  • Plan A – chase demand by hiring and firing
  • Plan B – produce at a constant rate of 1200 and obtain any remainder from overtime

Calculate the total cost of each plan then state your recommendation.

Price: $2.99
Solution: The downloadable solution consists of 6 pages
Deliverable: Word Document


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