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Mgmt339

Submitted By jchang784
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Homework 10 * Front brake calipers take 8 hours to forge and assemble * Rear calipers take 4 hours to forge and assemble * They pay their people \$22.00 per hour * It costs them \$900.00 to hire and \$1,300 to fire each employee * They currently employ 3 people * They have 129 front calipers in inventory and 113 rear calipers in inventory * Inventory carrying costs are \$7.00 per labor hour. * Assume 40 hours per week and 4 weeks per month.
The following is the 6 month demand forecast in units: Forecast in units | 1 | 2 | 3 | 4 | 5 | 6 | Front Calipers | 200 | 750 | 330 | 550 | 240 | 180 | Rear Calipers | 230 | 730 | 340 | 500 | 250 | 220 |

You will need to first figure what the level production amount will be using the following information over 6 periods: Forecast in units | 1 | 2 | 3 | 4 | 5 | 6 | Front Calipers | 1,600 | 6,000 | 2,640 | 4,400 | 1,920 | 1,440 | Rear Calipers | 920 | 2,920 | 1,360 | 2,000 | 1,000 | 880 | Total | 2,520 | 8,920 | 4,000 | 6,400 | 2,920 | 2,320 | Cumulative | 2,520 | 11,440 | 15,440 | 21,840 | 24,760 | 27,080 | (-) Beginning inventory | 1,484 | 1,484 | 1,484 | 1,484 | 1,484 | 1,484 | Total Cumulative Production | 1,036 | 9,956 | 13,956 | 20,356 | 23,276 | 25,596 | Monthly Production=Cumulative production/# of months | 1,036 | 4,978 | 4,652 | 5,089 | 4,655.2 | 4,266 | Use the following model to construct your analysis: Month | 1 | 2 | 3 | 4 | 5 | 6 | Beg. Inventory | 1,484 | 4,053 | 222 | 1,311 | 0 | 2,169 | Demand | 2,520 | 8,920 | 4,000 | 6,400 | 2,920 | 2,320 | Production | 5,089 | 5,089 | 5,089 | 5,089 | 5,089 | 5,089 | Ending Inventory | 4,053 | 222 | 1,311 | 0 | 2,169 | 4,938 | Hire | 29 | 0 | 0 | 0 | 0 | 0 | Fire | 0 | 0 | 0 | 0 | 0 | 0 | Total Employees | 32 | 32 | 32 | 32 | 32 | 32 |

| 1 | 2 | 3 | 4 | 5 | 6 | Hiring Costs | \$26,100 | 0 | 0 | 0 | 0 | 0 | Firing Costs | 0 | 0 | 0 | 0 | 0 | 0 | Wages | \$111,958 | \$111,958 | \$111,958 | \$111,958 | \$111,958 | \$111,958 | Ending Inventory | 16,212 | 888 | 5,244 | 0 | 8,676 | 19,752 | Total | 154,270 | 112,846 | 117,203 | 111,960 | 120,637 | 131,714 | Grand Total | \$748,630 | | | | | |