# Problem 11-6 Manager Chris Channing of Fabric Mills, Inc., has developed the forecast shown in the table for bolts of cloth. The figures are in hundreds of bolts. The department has a normal capacity of 275(00) bolts per month, except for the seventh month, when capacity will be 250(00) bolts. Normal output has a cost of \$40 per hundred bolts. Workers can be assigned to other jobs if production is less than normal. The beginning inventory is zero bolts. Month 1 2 3 4 5 6 7 Total Forecast 250 300 250 300 280 275 270 1,925 a. Develop a chase plan that matches the forecast and compute the total cost of your plan. Overtime is \$60 per hundred bolts. (Negative amounts should be indicated by a minus sign. Leave no cells blank – be certain to enter “0” wherever required. Omit the “\$” sign in your response.) Period 1 2 3 4 5 6 7 Total Forecast 250 300 250 300 280 275 270 1,925 Output Regular Overtime Subcontract Output – Forecast Inventory Beginning Ending Average Backlog Costs: Output Regular \$ \$ Overtime Subcontract Inventory Backorder Total \$ \$ b. Would the total cost be less with regular production with no overtime, but using a subcontractor to handle the excess above normal capacity at a cost of \$50 per hundred bolts? Backlogs are not allowed. The inventory carrying cost is \$2 per hundred bolts. (Round your Average values to 1 decimal place. Negative amounts should be indicated by a minus sign. Leave no cells blank – be certain to enter “0” wherever required. Omit the “\$” sign in your response.) Period 1 2 3 4 5 6 7 Total Forecast 250 300 250 300 280 275 270 1,925 Output Regular Overtime Subcontract Output – Forecast Inventory Beginning Ending Average Backlog Costs: Regular \$ \$ Overtime Subcontract Inventory Backorder Total \$ \$

Problem 11-6

 Manager Chris Channing of Fabric Mills, Inc., has developed the forecast shown in the table for bolts of cloth. The figures are in hundreds of bolts. The department has a normal capacity of 275(00) bolts per month, except for the seventh month, when capacity will be 250(00) bolts. Normal output has a cost of \$40 per hundred bolts. Workers can be assigned to other jobs if production is less than normal. The beginning inventory is zero bolts.

 Month 1 2 3 4 5 6 7 Total Forecast 250 300 250 300 280 275 270 1,925

 a. Develop a chase plan that matches the forecast and compute the total cost of your plan. Overtime is \$60 per hundred bolts. (Negative amounts should be indicated by a minus sign. Leave no cells blank – be certain to enter “0” wherever required. Omit the “\$” sign in your response.)

 Period 1 2 3 4 5 6 7 Total Forecast 250 300 250 300 280 275 270 1,925 Output Regular Overtime Subcontract Output – Forecast Inventory Beginning Ending Average Backlog Costs: Output Regular \$ \$ Overtime Subcontract Inventory Backorder Total \$ \$

 b. Would the total cost be less with regular production with no overtime, but using a subcontractor to handle the excess above normal capacity at a cost of \$50 per hundred bolts? Backlogs are not allowed. The inventory carrying cost is \$2 per hundred bolts. (Round your Average values to 1 decimal place. Negative amounts should be indicated by a minus sign. Leave no cells blank – be certain to enter “0” wherever required. Omit the “\$” sign in your response.)

 Period 1 2 3 4 5 6 7 Total Forecast 250 300 250 300 280 275 270 1,925 Output Regular Overtime Subcontract Output – Forecast Inventory Beginning Ending Average Backlog Costs: Regular \$ \$ Overtime Subcontract Inventory Backorder Total \$ \$