Consider the following proposed plan, for a different demand schedule, that comb
ID: 368317 • Letter: C
Question
Consider the following proposed plan, for a different demand schedule, that combines the strategy of hiring, layoffs, and utilizing overtime. Payroll costs are $6000 in wages per worker for regular time worked, with an overtime pay rate of $17 for each overtime hour. The cost of hiring a worker is $3400, and the cost of laying off a worker is $1900.
Quarter
Demand (hours)
Workforce
Hires
Layoffs
Overtime
(hours)
1
6,000
12
1
2
12,000
24
12
3
19,000
31
7
3,500
4
9,000
18
13
Total
85
20
13
3,500
The total cost for this plan would be $____ (Enter your response as an integer.)
Quarter
Demand (hours)
Workforce
Hires
Layoffs
Overtime
(hours)
1
6,000
12
1
2
12,000
24
12
3
19,000
31
7
3,500
4
9,000
18
13
Total
85
20
13
3,500
Explanation / Answer
Total cost for the plan will be calculated as :
Total cost for the plan
= Workforce strength x Payroll cost/ worker + Hiring cost / worker x Number of workers hired + Layoff cost /worker x Number of workers laid of + Overtime rate/ hour x Overtime hours
Therefore total cost of the plan
= 85 x 6000 + 20 x 3400 + 13 x 1900 + 17 x 3500
= $510,000 + $68,000 + $24,700 + $59,500
= $662,200
TOTAL COST FOR THIS PLAN WOULD BE = $662,200
TOTAL COST FOR THIS PLAN WOULD BE = $662,200