Question:
Assigning Capacity Costs: Seasonality
In discussing their business, Cathy and Tom realize that there are really three seasons instead of two, the third being the fall and spring (as a combined season). Each of the three seasons lasts exactly four months. They also know that Marcee's opens in midspring and closes in mid-fall.
Cathy and Tom check the order patterns and see the following demand (in gallons) in each of the three seasons:
|
|
Winter
|
Fall and Spring
|
Summer
|
Total
|
|
Chuck's
|
3,000
|
3,000
|
3,000
|
9,000
|
|
Marcee's
|
-0-
|
1,500
|
3,000
|
4,500
|
|
Total
|
3,000
|
4,500
|
6,000
|
13,500
|
Required
How would you modify, if at all, the cost system you designed previously for Cathy and Tom's in Problem 10-50? Why?