Evaluate the total ending inventory – Operation Management
Bart Incorporated manufactures rotary air fans and uses a production-planning horizon of one-half year. It allows for regular time, part time, overtime, and subcontracting production to meet the demand but no more than 12 units may be made by each of these methods. Both anticipation inventory and backorders are allowed. The beginning (or current) inventory is 20 units. Their first attempt at a sales and operations plan has resulted in the following.
|
1 |
2 |
3 |
4 |
5 |
6 |
Total |
|
| Inputs |
|
|
|
|
|
|
|
| Forecasted demand |
100 |
125 |
120 |
80 |
75 |
70 |
570 |
| Workforce Level |
80 |
80 |
80 |
80 |
80 |
80 |
480 |
| Part Time |
12 |
12 |
12 |
12 |
12 |
12 |
72 |
| Overtime |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| Subcontract |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| Derived |
|
|
|
|
|
|
|
| Beginning inventory |
20 |
12 |
0 |
0 |
0 |
0 |
|
| Ending inventory |
12 |
0 |
0 |
0 |
0 |
2 |
|
| Backlog |
0 |
21 |
49 |
37 |
20 |
0 |
127 |
| Calculated |
|
|
|
|
|
|
|
| Workforce level $5 |
400 |
400 |
400 |
400 |
400 |
400 |
$2,400 |
| Part Time $6 |
72 |
72 |
72 |
72 |
72 |
72 |
$432 |
| Overtime $7.5 |
0 |
0 |
0 |
0 |
0 |
0 |
$0 |
| Subcontract $8 |
0 |
0 |
0 |
0 |
0 |
0 |
$0 |
| Inventory holding $5 |
80 |
30 |
0 |
0 |
0 |
5 |
$115 |
| Back orders $20 |
0 |
420 |
980 |
740 |
400 |
0 |
$2,540 |
|
|
|
|
|
|
|
|
|
| Total |
$552 |
$922 |
$1,452 |
$1,212 |
$872 |
$477 |
$5,487 |
Use the information in Table 14.1. According to the production plan, what will be the total ending inventory in the second month after the second month’s demand is satisfied?
-21 units
0 units
21 units
Greater than 25 units
Bart Incorporated manufactures rotary air fans and uses a production-planning horizon of one-half year. It allows for regular time, part time, overtime, and subcontracting production to meet the demand but no more than 12 units may be made by each of these methods. Both anticipation inventory and backorders are allowed. The beginning (or current) inventory is 20 units. Their first attempt at a sales and operations plan has resulted in the following.
|
1 |
2 |
3 |
4 |
5 |
6 |
Total |
|
| Inputs |
|
|
|
|
|
|
|
| Forecasted demand |
100 |
125 |
120 |
80 |
75 |
70 |
570 |
| Workforce Level |
80 |
80 |
80 |
80 |
80 |
80 |
480 |
| Part Time |
12 |
12 |
12 |
12 |
12 |
12 |
72 |
| Overtime |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| Subcontract |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
| Derived |
|
|
|
|
|
|
|
| Beginning inventory |
20 |
12 |
0 |
0 |
0 |
0 |
|
| Ending inventory |
12 |
0 |
0 |
0 |
0 |
2 |
|
| Backlog |
0 |
21 |
49 |
37 |
20 |
0 |
127 |
| Calculated |
|
|
|
|
|
|
|
| Workforce level $5 |
400 |
400 |
400 |
400 |
400 |
400 |
$2,400 |
| Part Time $6 |
72 |
72 |
72 |
72 |
72 |
72 |
$432 |
| Overtime $7.5 |
0 |
0 |
0 |
0 |
0 |
0 |
$0 |
| Subcontract $8 |
0 |
0 |
0 |
0 |
0 |
0 |
$0 |
| Inventory holding $5 |
80 |
30 |
0 |
0 |
0 |
5 |
$115 |
| Back orders $20 |
0 |
420 |
980 |
740 |
400 |
0 |
$2,540 |
|
|
|
|
|
|
|
|
|
| Total |
$552 |
$922 |
$1,452 |
$1,212 |
$872 |
$477 |
$5,487 |
Use the information in Table 14.1. If the firm is committed to the regular production and overtime production as shown, what level of anticipation inventory would be needed at the start of the first month to result in an ending inventory of zero after month 6?
9 or fewer units
10 to 17 units
18 to 25 units
25 to 32 units
