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    Argosy University/ Phoniex University/
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Category > Management Posted 08 Jan 2018 My Price 7.00

Dundas Bike Components Inc.

17.              Solve Problem 16 using an inventory carrying cost of $2 per unit per period.

18.              Dundas Bike Components Inc. of Wheelville, Illinois, manufactures bicycle wheels in two different sizes for the Big Bike Co. assembly plant located across town. David Dundas, the firm’s owner- manager, has just received Big Bike’s order for the next six months.

 

 

Nov.

Dec.

Jan.

Feb.

Mar.

Apr.

20-Inch Wheels

1,000 units

900

600

700

1,100

1,100

24-Inch Wheels

500 units

500

300

500

400

600

 

 

a.    Under what circumstances will it be possible for David to develop just one aggregate plan rather than two (one for each size wheel)? Explain in two to three sentences without calculations.

b.   Currently Dundas employs 28 full-time, highly skilled employees, each of whom can produce 50 wheels per month. Because skilled labor is in short supply in the Wheelville area, David would like to develop a pure level-output plan. There is no inventory of finished wheels on hand at present, but David would like to have 300 on hand at the end of April. Big Bike will tolerate back orders of up to 200 units per month. Show your level plan in tabular form.

c.    Calculate the total annual cost of your plan using these costs:

 

Regular

$5.00

Hiring

$300

Overtime

$7.50

Layoff

$400

Part-time

NA

Inventory

$1.00

Subcontract

NA

Back order

$6.00

Answers

Maurice Tutor
(5)
Status NEW Posted 08 Jan 2018 08:01 PM My Price 7.00

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