The following information relates to a company's aggregate production planning activities: Beginning Workforce = 50 workers
Production per Employee = 250 units per quarter
Hiring Cost = $1000 per worker
Firing Cost = $1,500 per worker
Inventory Carrying Cost = $15 per unit per quarter
If a level production strategy is used then the total cost of the plan (hiring cost, firing cost and inventory carrying cost) is
A) $120,000.
B) $377,500.
C) $675,000.
D) $795,000.

Question

The following information relates to a company's aggregate production planning activities:  Beginning Workforce = 50 workers
Production per Employee = 250 units per quarter
Hiring Cost = $1000 per worker
Firing Cost = $1,500 per worker
Inventory Carrying Cost = $15 per unit per quarter
If a level production strategy is used then the total cost of the plan (hiring cost, firing cost and inventory carrying cost) is
A) $120,000. 
B) $377,500. 
C) $675,000. 
D) $795,000.

Quizplus · Accepted Answer

The Answer of The following information relates to a company's aggregate production planning activities:  Beginning Workforce = 50 workers
Production per Employee = 250 units per quarter
Hiring Cost = $1000 per worker
Firing Cost = $1,500 per worker
Inventory Carrying Cost = $15 per unit per quarter
If a level production strategy is used then the total cost of the plan (hiring cost, firing cost and inventory carrying cost) is
A) $120,000. 
B) $377,500. 
C) $675,000. 
D) $795,000.

The Following Information Relates to a Company's Aggregate Production Planning