Production budget based on a calendar year
Neely, Inc., is preparing its direct labor budget for 2010 from the following production budget based on a calendar year.
Quarter Units Quarter Units1 20,000 3 35,0002 25,000 4 30,000
Each unit requires 1.6 hours of direct labor.
Expected delivery within 24 Hours
Do you think these assumptions are realistic, or is the EOQ model an outdated technique for inventory control? If so, why? If not, why not?
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Price too high 20 Incorrect bill 8 Needed to return to correct problem 50 Total 10. Use OM Explorer to draw a bar chart and a Pareto chart to identify the significant service problems.
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