Posted on by Judy

Togo makes riding lawn mowers and tractors. The company’s expected quarterly demand is given below in the chart. The company will have 300 mowers in inventory at the beginning of the month and desires to maintain at least that number at the end of each month. Below is other critical data: Production cost per unit = $225 Inventory Carrying cost per quarter per unit = $50 (based on ending inventory) Hiring Cost per worker = $450 Firing cost per worker = $800 Beginning # of workers = 50 Each worker can produce 110 units per quarter Complete the tables and calculate the cost of the two plans LEVEL Plan Quarter Demand Regular Production Ending Inventory Workers Required Hire Fire 1 5000 2 9000 3 7000 4 9000 Total 30,000 3 CHASE PLAN Quarter Demand Regular Production Ending Inventory Workers Required Hire Fire 1 5000 2 9000 3 7000 4 9000 Total 30,000

https://d2vlcm61l7u1fs.cloudfront.net/media%2Fbf7%2Fbf7eb59e-ba26-447c-8e3d-65ed9e4e35e3%2FphpaY8tZB.png
Formula:
D4 =D3+C4-B4
E4 =ROUNDUP(C4/110,0)
F4 =MAX(0,E4-E3)
G5 =MAX(0,E3-E4)
Use fill handle to copy these formulas upto the end of table (row 7)
C8 =SUM(C4:C7) copy to B8:G8
C10 =C8*C9 copy to C10:G10
B12 =SUM(C10:G10)
Same table is used for Chase plan.
 
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