Laflamme Inc. is producing fire fighter suits. The sales forecast for the coming 6 months is:
January February March April May June 900 950 750 950 650 550
At the beginning of January, Lafamme Inc. is keeping 250 suits in stock and 8 employees working 8 hours per day. It takes 2 hours/person to produce one suit. The remaining stocks at the end of June will be sold
at 40% of their value.
Stock carrying cost Back orders cost Layoff cost
Hiring cost
Hourly wage cost for regular time Hourly wage cost for overtime Selling price
Notes
You have the following information:
10$ per unit per month 40$ per unit per month 250$ per employee 200$ per employee 20$
30$
1925$
Backorders units are non-cumulative We cannot sell units that we do not have!
1. Produce the following Global Plans
A. Use a Level Capacity Strategy plan without overtime and without new employees.
PLAN A Months Forecast Working days
January February March 900 950 750 20 18 20
April May June 950 650 550 21 21 20
Calculate costs according to this strategy.