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1st (1-13) 2nd (14-26) 3rd (27-39) 4th (40-52) 1st (Next Year) Notes
Forecast Demand 2,000 2,200 2,500 2,650 2,200 Each number is a 13 week forecast.
Ending Inventory Target 338 385 408 338 This is calculated based on 6 weeks of
future forecast demand.
Planning Data Numbers Units of measure Notes
Initial number of employees 60 employees
Emplyees per line 6
Forecast Demand by Quarter (1,000 Case Units)
Standard production rate (each line) 450 Cases per hour
Employee pay rate $20.00 per hour
3,000
Overtime pay rate $30.00 per hour
2,500
Standard hours per shift 7.5 hours
2,000
Maximum overtime per day 2 hours 1,500
Inventory carry cost $ 1.00 per case (per year) 1,000
Stockout cost $2.40 per case 500 Profit margin loss
Employee hiring and training cost $5,000.00 per employee 0
Employee layoff cost $3,000.00 per employee 1st (1-13) 2nd (14-26) 3rd (27-39) 4th (40-52) 1st (Next Year)
Cost of Plan 4
Labor Regular Time $624,000 $499,200 $561,600 $686,400 Employees are paid for 8 hrs work per day.
Labor Overtime $117,000 $93,600 $210,600 $128,700
Hiring and Training $0 $0 $30,000 $60,000 60 employees are employeed currently.
Layoff $0 $36,000 $0 $0
Inventory Carry Cost $686 $475 $476 $561 Carrying cost per year,divided by 4, multiplied by 1,000.
Stockout Cost $480 $1,647 $1,141 $1,143 Basic on negative deviation from target.
Quarter Budget $742,166 $630,922 $803,817 $876,804