Question

A firm must plan production for the next six months. Each unit costs $370 to produce and it has an inventory holding cost of $23 per unit per month based on ending inventory levels. The cost to hire a worker is $220, and the cost to fire a worker is $440 per worker. Each worker produces 10 units per month There are 20 persons on the payroll at the beginning of the first month. The company currently has 150 units of inventory in stock, and it wants to keep at least this many units as safety stock at the end of every month. Assume hiring and layoff/firing, if necessary, occur at the beginning of the month Month Demand 310 310 310 310 360 440 4 5 6 a. From the information given above, what level production rate will meet demand for the next six months? Using that rate, complete the level plan below. (Leave no cells blank be certain to enter "O" wherever required.) Level Plan Regular Production Ending Inventory Number of Workers Month Demand Hire Fire 310 310 310 310 360 440 2,040 2 4 Total 0 b-1. At that production rate, what is the maximum end-of-period inventory experienced at some time during the six months? Maximum end-of-period inventory units