The president of Hill Enterprises, Terri Hill, projects the firm’s aggregate demand requirements over the next 8 months as follows January February March April 1,400 1,700 1,600 1,900 May June July August 2,200 2,100 1.700 1,700 Her operations manager is considering a new plan, which begins in January with 200 units of inventory on hand. Stock out cost of lost sales is $125 per unit. Inventory holding cost is $25 per unit per month. Ignore any idle-time costs. The plan is called plan A Plan A: Vary the workforce level to execute a strategy that produces the quantity demanded in the prior month. The December demand and rate of production are both 1,600 units per month. The cost of hiring additional workers is $55 per unit. The cost of laying off workers is S75 per unit. Evaluate this plan. (Enter all responses as whole numbers.) Note: Both hiring and layoff costs are incurred in the month of the change. For example, going from 1,600 in January to 1,400 in February incurs a cost of layoff for 200 units in February Hire Layoff Ending Stock outs Period Month Demand Production nits nits Inve Units 0 December 1,600 1 January 1,400 2 February 1,700 3 March 4 April 5 May 6 June 7 July 8 August 1,600 1,600 1,400 1,700 1,600 1,900 2,200 2,100 1,700 200 1,600 1,900 2,200 2,100 1,700 1,700
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